Pay my loan off early

dealer_wins

Just to remind everyone that the VAST majority of bankers (99.9% of them) earn under £30K and work bloody hard just like any other worker!!

arcon5

CLAPTON wrote: »

The contract between the lender and borrower allows the borrower to repay the loan in part or in full early;
the exact rules about early settlement fees are governed by law.


why is that amazing?

Maybe you need to re read the op because op isn't asking about early repayment. Shes asking about not paying the last 2 payment of the loan

CLAPTON

arcon5 wrote: »

Maybe you need to re read the op because op isn't asking about early repayment. Shes asking about not paying the last 2 payment of the loan

A common knowledge of English often divides us.
Maybe reread the OP first post?

arcon5

CLAPTON wrote: »

A common knowledge of English often divides us.
Maybe reread the OP first post?

Okay lets break this down.

Op want's to pay off the loan early but wants to avoid being charged interest if she asks for a settlement figure (ie the early settlement rules)

justthecook wrote:

want to pay it off early but obviously get charged the interest if I ask for a settlement figure

And the way op wants to do it

justthecook wrote:

paid most of the loan off and left 1 or 2 payments left to go out,

This is not consistent with agreeing a settlement figure. This is merely defaulting on the last couple of payments.

And the logic behind it is

justthecook wrote:

making the banking system into thinking that it has been paid off normally????

Because

justthecook wrote:

The bank has already had £300 in interest which I think is fair for a loan I've only had for 5 months.

To agree and pay a settlement figure is not the same as defaulting on agreed payments the trick a system because op feels she has already paid a fair price for the service.

Of course agreeing a settlement figure would be the logical way of doing it. It would see the loan 'satisfied' and not be seen as a default.

ViolaLass

I didn't read it as the OP trying to default on anything, just trying to avoid ERCs, if any are applicable, by paying most of the loan off now but leaving a bit that would be covered by the next 1 or 2 months' normal payments.

OP, talk to the bank, they will tell you whether there are any ERCs and, if so, whether your plan of paying most of the loan off now would be allowed. Asking us is pointless, we don't know the terms of your loan.

arcon5

ViolaLass wrote: »

I didn't read it as the OP trying to default on anything, just trying to avoid ERCs, if any are applicable, by paying most of the loan off now but leaving a bit that would be covered by the next 1 or 2 months' normal payments.

OP, talk to the bank, they will tell you whether there are any ERCs and, if so, whether your plan of paying most of the loan off now would be allowed. Asking us is pointless, we don't know the terms of your loan.

Maybe it's worth op clarifying. I'm reading the post to mean something different to that

bigadaj

arcon5 wrote: »

Maybe it's worth op clarifying. I'm reading the post to mean something different to that

Think you're wrong.

ViolaLass

arcon5 wrote: »

I'm reading the post to mean something different to that

I can see that. I think you've jumped in with a lot of assumptions about the OP's intentions/wishes. An apology for assuming the worst might be appropriate.

justthecook

A big thank you to you all for your comments so far. I love the way some of you have made assumptions like myself being a woman and wanting to default on the loan.

My intention is not to default or defraud in any way.....if what my wife has been told by her bank is true.

I'm sure like most people we try to save money where possible in such difficult times. So when presented with the possibility of saving £300 I am willing to give anything a go.

My OP was asking for success or failure stories if anyone had paid off most of their loan early and left the last one or two payments to be debited as normal and thus avoiding paying more in interest by way of settlement. I completely understand that I signed a contract and agreed to the terms of the contract.

The original loan was for £3500 and have paid £925.90 over 5 months.
Interest charges paid so far is £260.01.

Should I do the proposed by paying off most of the loan and allowing the last two payments be debited as normal and then the bank writes to me to tell me I still owe them another £300 then I will of course pay it without argument.

CLAPTON

Ill try agian:

the maximum they can charge you by law is about two months worth of interest
as you don't say the APR of the loan I can't work it out but it won't be £300


if your T&Cs say that they charge a penalty on part payments as well as full settlements then there is no real benefit in making the part payments then letting the loan run for a couple of months but no real drawback either.

maybe read the T&Cs or just do it and see?