Overpayment of a loan

skyvicky123

I am in the process of paying off debts. Next on my list was a £10K loan with Santander which is over 5 years. The plan was to use freed up cash to overpay by approx £200 per month which is double the current monthly payment.

However...we have just spoken to them and they say that there is no facility to overpay as we took our loan out in May and apparently FSA rules allowing overpayment only came in in June.

I'm flabbergasted that I can't overpay. I know we should have checked the t's and c's but in all honesty at the time we didn't think we would be in a position to over pay, however thanks to the debt-free wannabe and old style boards we now can.

What should we do? Challenge Santander? Re-finance the loan? Save the money in an isa or throw it at the balances on our 0% credit cards? (which I think I can transfer to new 0% deals when the time comes)

Help or advice would be greatly appreciated! Thanks.

jonesMUFCforever

Read the terms and conditions of your loan first - Santander might have got it wrong.
Check with their website to see if it says anything there.

If overpayment is a no no then you could get a loan elsewhere but be aware of the early redemption fee.

CH27

Do they allow you to repay a lump sum once a year rather paying more each month?

skyvicky123

Thanks for the replies. I will probably look into re-financing it. I need to read the t's and c's tonight and check where I stand.

Thanks again.