Totally confused re overpaying loan...

ice_babe

Just called sainsburys bank, as we would like to overpay loan by £100 a month.

Apparently you get charged 58 days interest on every overpayment? And the lady was saying that it would cost us more to make a overpayment every single month and we would be better to save up each month and every few months make a larger overpayment?

Does this sound correct?

I had decided to overpay our loan at 6.7% interest over our Mortgage at 3.39 (soon to switch to 2.29 deal)

Now i'm not sure, its all over my head :eek:

ch3101

When did you take the loan out?

ice_babe

Nov 2012.

She basically said there was a interest charge for over paying and if I made regular overpayments that each time it would cost me in interest. Ie for example if I overpaid £100 a month I would only be paying £60

But if I paid 1 lump sum would only paid interest once

However on the terms and conditions it only mentions the 58 day interest charge on full settlement

ch3101

Yep, phone again and ask someone else. Hopefully they'll have some idea what they're talking about

ice_babe

So frustrating when you get told totally different things. Would it be better to write?

cos_2

I feel your frustration. If you write I have the horrible feeling they'll respond by asking you to phone . . .

ch3101

No don't write, it will be pointless. Just phone again

CLAPTON

maybe read the T&Cs of your loan?

ice_babe

CLAPTON wrote: »

maybe read the T&Cs of your loan?

I have
On the Sainsburys website



Can I make overpayment?

Yes, overpayments are where you pay more than your required monthly repayment. If you inform us in advance of making an overpayment we will apply this to your loan and this will reduce the total amount of interest you pay over the term of your loan and may reduce your loan term. Any overpayment without notice will only change the period over which you repay the loan and will not affect the rate of interest payable or the total amount repayable. If you want to make a lump sum payment, please send a cheque payable to 'Sainsbury's Bank' with your name and loan agreement number written on the back of the cheque to:- Sainsbury's Loans, Customer Services, Tower House, Charterhall Drive, Chester CH88 3AN.

Or, if you wish to make a payment electronically please use sort code: 126000, account number: 08110052 and quote your agreement number as the reference




Nothing about any "fees" for overpayments

SeanG79

You will pay 58 days interest on overpayments on the portion of capital you are reducing.
Interest is calculated on a daily basis on the capital amount outstanding.
By overpaying £100.00/month, you will save money (all be it small amounts) as opposed to saving up £600.00 and paying an overpayment every 6 months as you will still pay the 58 days interest on the portion of capital you are reducing and in the interim the capital outstanding is accruing interest.

Hope that makes sense?

ice_babe

So, Will it save me more money to call up every 6 months and pay £600 rather than each month and pay £100?

Thanks for your advice