First Direct - Partial Early Repayments

gallaghb

Hi

I've been corresponding with First Direct over the interest rebate due when you make an overpayment or what they call a 'Partial Early Repayment (PER)'. Does anyone know if what they have told me is normal industry practice or is it just them being weird?

Loan balance was £12635.92
Overpaid £1400
Normal payment £287.18
= New balance of £10948.74

I asked for details of the interest rebate as they don't tell you unless you ask them to send you a 'PER statement'.

The statement advised that an interest rebate of £292.41 was due owing to the £1400 PER/overpayment.

The statement then also advised that the balance was still £10948.74. This is when I queried with them that surely the interest rebate should now also come off the outstanding balance? They said no that any interest rebates accrued due to overpayments/PERs are paid to my bank account once the loan is fully repaid.

Is this normal? I had assumed the rebate would be taken off the balance. Seems odd that they hang on to it until I repay the loan. I'll have to make sure I keep a tally of the rebates and ask them for the money when I fully repay!