Loan Terms

iwillgetthere_2

Well i have cancelled my loan protection as i will have the money to clear my loan at end of april, yay!

As i have cancelled the protection i have been sent a new loan agreement for 12 months, which is what is left from a loan that was originally for 3 years, although as i say i will be clearing the loan end of april, there is a paragraph about early settlement which isn't clear to me,

the loan is with alliance and leicester,total amount of loan is 1896.60 made up of 12 payments of 158.05:

If you settle your loan early, the settlemet amount that you would have to pay per 1000 borrowed would be as follow, for example, if you wanted to settle when a quarter of the repayment period has passed the settlement amount per 1000 would be 757.97

Can anyone explain simply to me what this means? I just want to get everything clear in my head before i return the agreement and make sure it is worth changing to the new terms.

Thanks for your time.

SparciaM

When you settle a loan early they'll add 1 - 2 months interest on top as a penalty, so you may end up paying more back settling early than leaving for full 12 months. Best thing is to request a settlement figure in 1 month and then just deduct your payments off that each month to see how much you'd pay.

Eg.

Loan £2000 over 12 months at £200 (for simple reasons). started in Jan

Feb settlement is £2100, so if you repay in April it would be. £1700 or near that amount