Paying off loan early - no terms and conditions

nicnoo

Verbally and in a personal message through HSBC internet banking.

Apples2

The terminology is critical.

Ask for an Early Settlement Figure - as if you are going to clear the account TODAY. Ask how much you would have to pay if you sent the money immediately. The Settlement figure will only be temporary (because of the interest and monthly payments).

If you ask how much is left to settle the account, they will simply tell you how much is left to pay at the current rate (this sounds like what they are giving you).

Not suggesting you are wrong at all, just trying to be absolutely clear.

paddyrg

Apples2 speaks wisely! I am not sure, but don't CCA rules prevent front-loading, so interest has to be calculated according to a set rule?

Faselei

Hi,

Interested in this one as I've asked HSBC for a closing balance on my loan (2007 for c£10k at 7.9%, 60 months at £215 due to end May 2012) and they said the same thing, that all the interest is 'front loaded' so the closing balance is the same as the running balance currently displayed on internet banking.

Therefore if I settle today I have to pay for 9 months interest, even though, as outlined in the credit agreement (which I still have) and legally covered by the CCA they can only charge 58 days.

I'm pretty sure they just don't want to take the P&L hit, which must outweigh the cash flow benefit I guess. I've replied twice saying I think they're wrong and the last response asks me to tell them how much interest I've paid, at which point I gave up!

DCFC79

ykg wrote: »

Ok But i am not take loan from any bank but your post is very informative

come again

paddyrg

DCFC79 wrote: »

come again

TBH probably forum spam - can't find time to post sensibly but found the time to put a link to their loans company on their profile.