25k Loan deferred payments and settlement figure help

riverboat2001

Okay, the whole story (didn't really intend to go into too much detail, as you never know who will be reading.)

We will be selling one of our houses in about 6 months time (yes it should sell, because we're going below market rate) We have a lot of equity in it.
We had already decided to spend up to 50K on our next Van, it has been the goal all the way along.
And yes i do already save more than the monthly repayments on this loan.

The loan is on a 3 year old Motorhome, £80K new, £38K now.

We have spent months looking for the right one, in as new condition and we've found it. Dealers often discount or throw in nice extras on these vehicles at this time of year as they are hard to shift in the winter!

We have been approved for the loan, the paperwork is here waiting to be signed.

I've read the paperwork, and still don't understand the wording. I can phone them up later, but just wanting to get it explained in plain English here first.

It says the penalty for early repayment is equivalent to two months interest. So if the loan were for £23K and the total borrowing was £38K (just random numbers here, not my actual figures)

Would i pay the 2 months interest on £23k, £38K, ?

Cheers

iolanthe07

Ask if you are allowed overpayments. If you are, pay it all back when you sell the house, less £100. The interest on £100 will be negligible and there will be no early redemption charges. Make sure you pay off the final £100 when the loan ends.

lifebeginstoday

Two months on whats borrowed ie 23K not the order value of 38K.