We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
How flexible are loans now?

lottie3000
Posts: 449 Forumite
in Loans
I am planning on taking out a loan in the next month and have been reading in various places that the rules have now changed regarding them. Is this true? Are they now more flexible when you want to repay them early??
0
Comments
-
Yes.
On any new loan lenders now have to let you pay overpayments off your loan in addition to you being able to settle early. They are still allowed to charge an interest penalty for settling early and are allowed to charge a percentage of any overpayments you make.
See this extract -
Loan lenders must let you overpay. If you've spare cash you can overpay each month to clear the debt quicker. Providers can charge you up to 1% of the overpayment (if there's at least a year of the loan term left) or 0.5% (if under). Before, the only flexibility you had was to pay the loan off in full early, usually at a cost of one month's interest, which still stands.
- from this article The credit card and loan shake-up: what it means for youA smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0 -
So if I was to overpay the loan in the first year would the second year payments be reduced?0
-
Depends on the lender. Some will reduce the term but keep the payments the same, some will reduce payments and keep the term the same.
I think some might even give you a choice (possibly).A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0 -
Tixy - does this apply to new loans only or existing ones?Debt at worst: £33000 (Feb 2011). Present debt: £25610 (Apr 2012)
Lloyds old (22.4%) = 560 (Dec 2012)0 -
Only has to apply for loans taken out after 1st Feb this year. I think I might have read some lenders were doing similar for older loans but not sure who.A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0
-
Thanks Tixy. Now I know it's a possibility I can bother my bank about itDebt at worst: £33000 (Feb 2011). Present debt: £25610 (Apr 2012)
Lloyds old (22.4%) = 560 (Dec 2012)0
This discussion has been closed.
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 351.4K Banking & Borrowing
- 253.3K Reduce Debt & Boost Income
- 453.8K Spending & Discounts
- 244.4K Work, Benefits & Business
- 599.7K Mortgages, Homes & Bills
- 177.1K Life & Family
- 258K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards