Cahoot/Santander Flexi-Loan repayments

Cell

Hi

Yesterday I enquired about paying off the above loan and was quoted a figure around £100 more than it should have been, even allowing for the interest incurred between the last statement date and the day I’d pay it off.

The customer adviser said that there is a penalty of 30 days interest if the entire balance is cleared. She alleges that it was in Cahoot’s initial terms and conditions and that since they’d taken it over Santander has applied the same criteria.

For some reason I don’t have any documentation in relation to the Flexi-Loan (I’m normally very good at this sort of thing so am a bit puzzled).

The silly thing is that if I paid off 97% of the balance and then, in the next statement cycle, cleared the remainder then the 30 days penalty would be mere pennies, assuming it’s based on the statement balance.

I am aware that in the case of ‘normal’ loans there can be an interest penalty for early repayment, but the whole point of the product was that it allowed flexibility – a credit card type of borrowing that you could take cash out of if you wished, repay what you want where you want it etc. In theory, if the account was still providing credit, you could borrow £500 one month, pay it back the next and so on. Surely they wouldn’t apply a penalty on each occasion a customer did this?

The only difference now is that you can’t borrow any more on it, so the terms etc have been frozen.

Has anyone else any experience on this, or access to any documentation?

I’ve paid off just short of the full balance by the way, so this should not impact on me too much, but I was curious whether anyone else had experienced this.