Natwest Personal Loan repayment

takemethere

Morning everyone, I'm a new poster hoping to gain some clarity on my Natwest Personal Loan, which Natwest have failed to provide.

I took out a 12 month £1000 Personal Loan from Natwest at the end of August. I unexpectedly needed to relocate to London and didn't have any savings to cover the cost. I actually asked Natwest to extend my graduate overdraft, but they said no because I hadn't been using it as my current account since I graduated a year ago, and recommended I take out a loan. I never thought I'd ever take out a loan, but when the staff at the branch went through it with me it seemed like a good idea.

I only used £200 of the loan and have been ready to pay it back for a while. The terms of my loan state that my total repayment after 12 months will be £1116. On 1st October I paid my first monthly repayment of £93.60, which I was expecting. However, I was not expecting to pay interest on the 31st of each month too.

I was already confused that £93.60 x 12 = £1123.60, which is more than my agreed total repayment. With interest at the end of each month it would work out a hell of a lot more.

I've spoken to FIVE people at Natwest about this and they have all been entirely useless. I made a complaint about the awful service I received (one guy clearly just wanted to get me off the phone, another said he would ring back the next day and didn't, another I got cut off and didn't get a call back) and also asked for someone to explain it to me. My complaint took over two weeks to resolve and they've given me £36 compensation, but still haven't explained why I'm paying interest on top of my monthly repayments. I only received the letter 'resolving' the complaint yesterday and it's now too late for me to pay the original resettlement fee I was quoted (which I was going to do because I've just given up). Another repayment and more interest have left my account today.

I'm so frustrated and the thought of having to speak to another person and explain the situation for the sixth time is not appealing. Can anyone shed any light on this?

imoneyop

What does your loan agreement say - that will give you the APR of the loan, your monthly payment and total amount to be paid.

How much exactly did Natwest take from your account on 1st Oct?

jamesd

You don't need to wait for any specific settlement date or figure. You can just pay whenever you like and a lender has to work out the settlement figure for whatever portion you pay. They can charge up to roughly two months of interest on the extra amount paid if they want to, most do.

takemethere

Thanks for the replies.

I don't have the loan agreement with me, but the total amount to be paid is £1116.

I know that I can repay when I like. Perhaps I'm not being clear - I want an explanation of why I am being charged interest at the end of every month, when if I have my loan for the full 12 months, this will make my total repayment far more than £1116.

On 1st October they took £93.60 (monthly repayment) and on 30th September £17 (interest).

~Beanie~

Are you sure that the £17 interest relates to the loan and not your overdraft?

dotdash79

Yea that interest looks like a overdraft interest payment, Do you have an over draft of about £1500 which are are in for most of the month?

opinions4u

Are you looking at an online banking statement that relates specifically to the personal loan?

Does the £17 interest relate to this?

Have they actually charged this to the loan account or have they taken it out of your current account (there is a rather significant difference in these two scenarios)?

Why do you think they shouldn't charge interest on the loan?

If I've understood correctly the £93.60 includes £17 of interest. The £17 is not in addition to the £93.60.

In other words, what they're doing is simply explaining that you borrowed, interest has been added for a month, a payment has been made, the balance has dropped ... then repeat until 12 months have passed and the debt is nil.

If I'm right, you've started off confused and successfully bamboozled the staff you've spoken two by over-complicating everything!

fozmcfc

Looking at the Natwest site, borrowing £1000 over 12 months at the representative rate of 22.9% =£1116.24, with repayments of £93.02 a month.

Are you sure you were accepted at the representative rate?

Are you sure PPI isn't being added as well?

The only real way of people giving you advice, is if you have the agreement and see what it says and if it still doesn't make sense, post up info here.

If you can't find the agreement, then ask Natwest to provide you with a copy.

Clive_Woody

Normally the monthly repayment would include interest charges so as others have suggested I would guess that your graduate overdraft that may have been interest free has just started charging interest and this is the other charge that you are seeing (they do this a certain period after you have graduated - check your overdraft paperwork).

20aday

If you have access to NatWest Online Banking try the following?

Log in as per, click on "Statements" on the left-hand side.

On the next screen click "View future Interest or Charges."

This will show any charges for the Overdraft that have/are to be debited from your bank account.

Failing that, they are applying the loan interest at the end of the calendar month, and then taking the payment on the 1st of the month.

This is how it works with my NatWest Loan: the payment is taken on the 30th of the month for £129.78; this reduces the balance by a certain amount. On the 31st of the month, interest is charged.

Again look at your Loan on the page showing the accounts, choose the drop down box and it will give you a detailed overview of credits and debits.

jonesMUFCforever

takemethere wrote: »

Thanks for the replies.

I don't have the loan agreement with me, but the total amount to be paid is £1116.

I know that I can repay when I like. Perhaps I'm not being clear - I want an explanation of why I am being charged interest at the end of every month, when if I have my loan for the full 12 months, this will make my total repayment far more than £1116.

On 1st October they took £93.60 (monthly repayment) and on 30th September £17 (interest).

It is fairly straightforward to explain.
You are charged £17 this month as you have only taken the loan out. As you make more repayments the monthly interest will decrease until the last month it will be negligible.

You will end up paying what is quoted on your copy of the CCA agreement unless you repay early.