Loan Overpayments

warburtonrichard

hello

My partner has just taken out a loan with nat west. The loan account popped up in internet banking with the full amount of the loan plus the interest loaded onto the loan up front.

He was careful to check that he could make overpayments to his loan according to the terms and conditions of the loan.

Does anyone know if he makes an overpayment, whether they will make an adjustment to the loan to reduce the interest that will be payable over the rest of the term of the loan?

If not, he's better off keeping hold of the money rather than making overpayments, but I suspect I am wrong in this.

Any help, greatfully appreciated.

Cheers

Richard

plane_boy2000

I cant speak about your specific loan because I cant see the terms, but if you repay the loan early then normaly you would get an interest refund of some sort. Now following this through if you made overpayments you would in effect repay the loan early so I guess you would then get some kind of refund.

It does sound odd though that if this is a flexible product they had added all the interest up front so it woud be best to check with them. I have a loan with IF, and the interest is added each month so if I make an overpayment it is refected in next months charges.

WH39

check your t&C. new loans will state how much you can expected to pay back at different stages of the loan if you try to settle the loan early. a rebate may apply depending, at which stage you settle the loan.