HSBC loan redemption figure

aawon

My husband borrowed £3,500 from HSBC in the summer over 36 months at 18.9%. He has made payments totaling £300 to date. We phoned to pay it off last night and they want £3,435. When we queried the amount (expecting it to be around £3,300) the man on the phone said it was too complicated to explain but it was in T&C (I looked and they don't give details).

Can anyone explain how the get to the redemption figure?

iolanthe07

You usually have to pay a penalty of two month's interest (sometimes more) if you pay off a loan early. It will be in their T & C's.

StuC75

Interest is charged from the date of advance - and when providing a redemption figure will add in approx. 56 days of interest on - this will be covered within the terms & conditions..

Are you sure of the payment amount \ rate since I worked payments to be about £128 if its 18.9% over 3yrs.. Is the payment about to be claimed as the different could be a payment that's 'about' to be taken?...

Tixy

How many payments has he made so far? 2 or 3? they appear to be £128 a month based on your figures?

To check the settlement figure is correct input the loan details in to a calculator like this - http://www.theguardian.com/money/loan-repayment-calculator-interest-rates, then you can see the capital balance that should be outstanding for the current month, and add on the next 2 months interest charges, it should be approximately the same as the figure they gave.

aawon

i also worked out the payments to be £128.12 but HSBC told him they were to be one payment of £125.74 and 35 payments of £125.56. He made 2 monthly payments so far i.e. total £251.30 and made an extra payment of £50 over the phone last night. The man on the phone confirmed the interest rate of 18.9%

dotdash79

that calculator is wrong, I've just put my details in and it's £1.75 a month higher than what I'm paying. so that difference is reasonable