We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

HP Rebate?

Hi all. I'm new to the forum but have been using MSE for quite a while. My question is this...

I had a HP agreement with Welcome Finance (yes, I know) which was due to be paid off next year, around April. It was a 48 month agreement at a fixed monthly rate of £218. I started increasing the monthly payments a while ago and have now paid off the agreement 8 months early. So, my question is, am I due a rebate for early settlement? I asked the advisor at Welcome when I paid the last instalment but they were a little vague to say the least!

Many thanks in advance! :beer:

Comments

  • We're in the same position.

    Paid off a loan early through over payments and when husband called to see if we get a rebate today, WF basically said we were due nothing and baffled him with figures. We have paid the loan off 7 months early.
  • Eonel
    Eonel Posts: 451 Forumite
    edited 8 August 2012 am31 5:50AM
    Paying off a loan early will not trigger a rebate.

    Interest is worked out dynamically every day, while loan repayment amounts are fixed.

    Your overpayments have been reducing the amount of interest you are being charged. But as the loan repayment is fixed, the extra money is being allocated to the outstanding balance of the loan. You see the benefit in a reduced number of payments.

    You have saved yourself money - you have saved yourself loan payments you don't have to make.

    Apologies if still baffling.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.3K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 240.9K Work, Benefits & Business
  • 617.2K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.