Paying back a Lloyds TSB loan early.

simone83

Hi,

I have had a loan with Lloyds tsb for a while now and will be in a position to clear it in a few months due to some extra income.

my question is do I save it all up and pay it in one installment (settlement figure way) or make overpayments to bring the balance down and the settle on a smaller amount - so incurring a smaller settlement fee?

The reason I am asking is the lady in the bank advised me when I took out (2008) that loan that should I wish to pay it back then I should reduce the balance to £10 one month and then settle the month after as I would only be charge x amount of days interest on the £10 instead of the whole amount. Does this seem right? would I not incurr charges everytime I made an overpayment? and has anyone had experiance if this with Lloyds TSB recently.

Thanks in advance, Simone

jonesMUFCforever

I would go down the overpaying route.

Saints2011

Pay the balance less one months worth of direct debit, then the direct debit will come out for final payment and the loan will be settled and you will not be faced with any early repayment charges.

shaneshaneshane

option 2 my friend

kavics17

I settled my Lloyds loand a couple of months ago by overpaying it-left £25 on the account. 3 days later asked for settlement figure, which was £25.51 so paid £0.51 early settlement penalty on it.

mrminstrel

hi there, sorry for being dumb but i am a little confused so please help if possible,

i currentley have a lloyds tsb loan which has 23months left to pay and i recentley asked for a early settlement fee which is as follows.

outstanding loan £6,317,09
amount to settle loan £5,514,81
rebate on settling loan early £802.28

i currently pay repayments of £296 plus a couple of pence.

surely me settleing early is more benifical to me then overpaying and reducing the the final pay off figure?
as im already being rebated just over 800 am i right? surely this works out better??

please help new to all this

jonesMUFCforever

The rebate figure suggests to me a part refund of PPI if you repay early.

mrminstrel

hi thanks for your reply.

but no this carn't be as the loan does not have ppi on it and is an unsecured loan taken out in august 2010

the original total loan amount was £9,000 but including intrest was £12,455.94 over a 42 month period of which i am now half way through.

also should it not be i get roughly £1600 rebate for paying up early as this equates to the half 42 monthly intrest amount of £3,455.94

and also what ive been suggested i should get taken off the total amount??

thanks

jonesMUFCforever

Your CCA agreement shows the total interest they would charge if you went full term on the loan.
The interest is charged daily - so there is no refund of interest due - the saving you will make is on the interest they will not charge you due to your early settlement.
You pay a lot more interest at the beginning of the loan than at the end so your simple interest calculation is incorrect.

mrminstrel

so what would it be best to do do you think pay it as an early settlement? or overpay and save on the early settlement fee?

jonesMUFCforever

Pay most of the loan minus say £100 - let the d/d go through as normal then the loan will go into credit - they will refund any overpayment.
You then save most of he ESF.