Early repayment of personal loan

vikramrkin

Hi,

I have taken a personal loan from Lloyds TSB for approx £10k for 3 years. Their T&C about early repayment states that “there may be a charge of upto 58 days of interest if the loan is closed early”. Now I am thinking of closing the loan in full after about 2 months. I want to know under what circumstances they charge the 58 day interest as their wording says they may charge. Does anyone have any experience with this?

Thanks in advance
Vik

Carcluster

I have payed loans off early a few times, but usually at past halfway through; car loans for 4/5 years then changed car at 2/3 years and any extra charges are usually negligible. I would have thought that paying off so early might be more open to those kinds of clauses as the company have not made their cut on the interest yet.
Is 58 days of interest worth it as you are then not actually paying it for the next few years?

Moneymash

Pay the entire amount off except for the last DD payment and the loan should end naturally and you shouldn't incur interest charges.

Alternatively pay off almost the whole sum save £100 or £50 etc and then ask for a settlement figure on this lower amount, then 58 days interest is going to be a lot lower, than 58 days interest on what you could pay on what would be virtually the whole amount of the loan.

bengalknights

Ive paid loans off way before half way point and never been penalised the words "may be" are the key ask before you pay.

vikramrkin

Thanks for all the reply. I think its a good suggestion to pay off everything except the last DD. I will try that. Thanks.