Tesco Loan overpayments

ch3101

copperjar wrote: »

My loan was taken out prior to 2010. From the T&Cs it seems there would be no benefit to me making overpayments in terms of a reduction in the interest charged. Is that right? So I'd be better putting the additional payments into a savings account, then settling early and getting some interest back.

Loan applications made before 11 June 2010
Any additional payments made will be applied to your loan and may reduce the total number of monthly payments on your loan. However, there is no interest benefit to making an additional payment to your loan. This means that the amount of interest you pay on your loan will not reduce as a result of this payment.

Correct. You do save when you settle in full, just now on overpayments

copperjar

ch3101 wrote: »

Correct. You do save when you settle in full, just now on overpayments

Thank you. That's a bummer. Much prefer paying overpayments directly onto a debt than into a savings account but hey ho

james3333

copperjar wrote: »

Thank you. That's a bummer. Much prefer paying overpayments directly onto a debt than into a savings account but hey ho

OK, so im overpaying my tesco loan, a bit each month, but the interest was lumped onto the loan straight away so now when i pay into it i can see the amount dropping each time, but when will i get 'the rebate' if i have paid interest upfront!?
thanks

chanz4

it takes it off each time, read the letters they send you eachtime

james3333

chanz4 wrote: »

it takes it off each time, read the letters they send you eachtime

Aint had any letters !?
because all interest is paid up front i dont get it,
for e.g if pay £100 off the remaining £15,900, shouldnt the remianing balance be lower than £15,800?
??

[Deleted User]

The interest isn't all paid up front. It's calcuated daily. So the less you owe, the less you pay.

james3333

Deleted_User wrote: »

The interest isn't all paid up front. It's calcuated daily. So the less you owe, the less you pay.

not with my tesco loan, it all got put on the initial amount, saw it online!

[Deleted User]

I doubt it. The will be the amount that you will pay if the loan runs full term. It also provide the basis for calculating the monthly payments.

Unless your loan is very old, it's calculated daily, so the quicker you repay, the less you pay.

chanz4

Yes its put on up front, but everytime you pay you get a letter with an intrest rebate.

james3333

chanz4 wrote: »

Yes its put on up front, but everytime you pay you get a letter with an intrest rebate.

ah, cool, got a letter yesterday and your correct.
it states that i have an interest rebate of £40 by overpaying £158....is that correct, seems a lot!
the loan is for 17k over 4 years @6.1%