NRAM early repayment rip off (Northern Rock)

surfbluesurf

Good morning..

I have an unsecured personal loan with Northern Rock Asset Management which I'd like to get cleared.

The interest rate is extortionate to be honest and it'll take another 25 years to pay off at their current repayment rate.

I called them for a settlement figure the other day, which I expected to be a lot less than the £14.5k that is the 'closing balance' on my latest statement, but according to them the balance is what is needed to repay early, no interest reductions.

Is this allowed? I was under the impression that any early repayment of a loan got an interest rebate under consumer credit laws?

To illustrate -
Original Loan - £15000
Payments made - £7062(approx)
Balance - £14525
Early Settlement - £14525

This can't be right, can it??

Many thanks to anyone who can assist.

Tixy

The balance on your statement doesn't include the interest you will pay between now and the end of the term.
Its the amount of capital amount outstanding.

Apples2

In the early days you were paying almost all interest and hardly any capital. That's why the capital outstanding has hardly dropped.

As time goes by, the amount of interest you are paying reduces so you take larger chunks out of the capital. You last scheduled payments would be almost ALL capital and hardly any interest.