Advice on Barclays Loan Overpayment

chocoholic_chick

I was hoping someone might be able to shed some light on how Barclays treat loan overpayments. I previously had a loan with Sainsburys which I made regular overpayments to, the full amount I overpaid would come off the balance and I would also get a partial refund of interest as well ( I got a letter each time explaining all of this ). That loan is now cleared so I'm focusing on overpaying my Barclays loan. Before making my first overpayment I checked their website and it states :-

Repaying your loan early
You can repay your loan early in full or in part at any time. In addition to any other interest that’s due, we will charge you a fee equal to 30 days’ interest, calculated on the amount being repaid for a partial repayment or on the amount you owe us where you repay in full. For more information, call 0800 716 598 4 or visit a branch.


I was a little confused about this as I thought recent legislation meant they could no longer do this so rang their customer services department to ask whether I would be charged anything if I made an overpayment and she assured me I wouldn't so, on Monday, I made an overpayment of £150. When I log in online I can see my current loan balance, it took a couple of days to update the balance and when I've checked this morning the amount outstanding has reduced, but only by £137 so it looks as though I've been charged £13 for making an overpayment? I can't go into any further detail on it, it only shows the amount outstanding.


I would have expected my balance to reduce by the full amount I had overpaid or am I missing something here? Just if I'm going to be charged £13 every time I make an overpayment then I'd be worse off then just leaving it to run its course.

Tixy

When did you take the loan out?

Which legislation applies depends on when the account was opened.
With the new legislation a lender must allow partial overpayments, but they are able to charge a fee on them.

When you checked the website were you specifically looking at the terms that apply to your loan? or the terms that are in place currently? If the latter then perhaps check your own agreement?

chocoholic_chick

I took the loan out earlier this year. I specifically asked the person on the phone if there would be any charges and she said no. I just looked at personal loans and what the rules are currently on their website, I can did the paperwork out for my loan tonight. Just annoyed I've been told on the phone that I wouldn't be charged and I clearly have, I'd never have made the overpayment if I knew I'd be charged. They record the calls don't they? Maybe I could ask them to check if they have the call recorded and refund the charge because I was told incorrect information?

CAN1976

The loan is accruing interest daily, though the "last night's balance" figure only changes once a month after your regular payment. When you make an overpayment it first clears the accrued interest since your previous scheduled payment and the remainder comes off the balance. This means that more of your next regular payment applies to the balance as there will be less accrued interest to consider.

Been through this with Barclays myself

CAN1976

example for clarity
regular payment made on 31st

1st £5000
2nd £5001
3rd £5002 o/p of £100 made
4th £4903

so ut looks like only £97 of the £100 was applied and you have paid a charge, but really you were just clearing the interest so far that month. The more time after your regular payment you made the overpayment the worse this affect will seem.

Moneymash

I too have/had a Barclays loan, originally due to finish December 2014 and was against over-payments because of the fees. My paperwork says 30 days interest charged on partial payments. However, it has been pointed out on this board previously that it's still worth making over-payments even with the fees. My first over-payment was for £600, so that's an over-payment of £600 minus 30 days interest, but I will no longer have to pay daily interest on the remainder of the over-payment, so still worth it. I have since made further over-payments to get the balance down and pay the thing off a whole year early.

My loan balance on Friday 29th November was £554, I made an over-payment of £280. My monthly loan repayment DD comes out on the 2nd. When I checked my online account on Monday 2nd, my outstanding loan balance was £280 (£554-£280 = £274 then add the month's interest which gets added on 2nd).

From my current account they had taken my usual DD of £285.10. I have checked my account again today and the outstanding loan balance is £0.00. So my balance should be in credit by £5.10 minus the 30 day interest fee on the £280 over-payment I made on Friday 29th.

I find it irritating that you can only see the outstanding balance in whole numbers and have to wait until you get an annual statement to scrutinize the account.

Edit: I have just found out they have up to 10 days to send out statements for closed accounts. It will be good to verify everything.

chanz4

How did you over pay, be helpful for others

chocoholic_chick

Thanks for the replies, so Can1976 it looks as though you weren't charged any fees, just the accrued interest was taking off but moneymash you got charged a fee for early payment. Hmmm need to dig out the paperwork!!

chanz I just rang up and asked for the sort code and account number I'd need to use to make overpayments to and then did and online transfer. Is that what you meant by your question?

chanz4

What are the details you pay into, and is the ref the one that's online?

chocoholic_chick

The details I have are unique for my account, I didn't have any info online other than my outstanding balance. If you ring customer services they'll be able to give you the details you need to make overpayments

chanz4

okay thanks, I just thought it would be the ref and a generic acc . thanks