Just enquired about paying a loan off early...

Hels_Bells_3

I currently owe Abbey £1816 (interest is 20.7% )

They said i would need to pay a 'little interest' and then proceeded to give me a figure of £2056 to pay te loan off in full, early despite all literature i have NOT mentioning paying any penalties for early payment of the loan.

Now, it has put me off paying the loan off early as i could use that £240, but is this standard procedure and should i just get it paid off and out of the way?

Sorry for the simple question but i really am clueless and my family don't know about this loan so can't really ask them about it:rolleyes:

Robert_Sterling

You have borrowed money at a very high rate of interest. Why?

hopeless_case_2

i do not know if it is standard procedure but i fail to see how you can owe more. If i wereyou i would ask them for a breakdown of figures and how you need to pay more interest over a longer period.

regularsaver1

some charge a month or two's interest to repay early

Hels_Bells_3

Robert_Sterling wrote:

You have borrowed money at a very high rate of interest. Why?

because i had absolutely no credit rating when i borrowed the money, there weren't many people (in fact no-one) offering me a better rate, if they were willing to give me the money at all!

Also, twas before my mse days :rolleyes:

SparciaM

How long have you had the loan? If it within the first 6 months then you always pay back more than you borrowed due to the 1-2 month penalty clause.

If longer than 14 months, then u need a breakdown of why so high, as a settlement figure is:

Your outstanding (1816) - (interest for remaining term) + (penalty interest) so should always be a little lower than the original 1816 but not within the first 6 months

nicolafitz

my partner just took out a loan and at the same time enquired if he would have to pay a fee for early repayment.
He was informed on that what he shoulr do is pay off what he likes but leave enough in the account to allow the creditor to take a normal last instalment payment and because they take the last payment they can't charge early re-payment fine.....this came from the banks manager...needless to say my partner was told to keep hush about it.

Hope the above helps

ianfao

I have just paid off a loan half way through the agreeement with Liverpool and Victoria and the amount to pay back was £180 less than what was outstanding.