In a position to pay off car balloon payment loan

SeanG79

nelly12 wrote: »

You quoted overpayment which was where I corrected you.

an overpayment is defined as a partial early settlement within the Consumer Credit Directive - read up on it before you attempt to correct me...

nelly12

SeanG79 wrote: »

an overpayment is defined as a partial early settlement within the Consumer Credit Directive - read up on it before you attempt to correct me...

Partial settlements do not attract the same penalty as full settlement surely? Perhaps you could quote the legislation rather than a link that no one will read.


Ps. Check with your finance providers as we know of two of the biggest who charge for debit card payments.

SeanG79

I am not going to argue with you about debit card payments, Black Horse - no charge, Close Motor Finance - no charge, Santander Consumer - no charge.

Finally overpayments, it is NOT a penalty charge, a settlement figure is calculated as 28 days + 1 month from the date of notification. (that would be the amount owed to the finance company if you paid on that day - from that figure, whatever overpayment (partial settlement) you make is deducted, giving the balance owing, which will then continue to accrue interest at the rate stipulated in the agreement). Depending on the finance provider, they will then either shorten the term of the agreement and keep the monthly payments the same, or they will reduce the monthly payments and keep the term the same - need to check contracts as it varies among lenders.

Additionally as I said there is no penalty for an overpayment, however most vehicle finance contracts include the following clause

We may have the right to compensation if the amount of a single payment in respect of early settlement exceeds £8,000 or the total of early settlements exceeds £8,000 in any 12 month period. The compensation must be fairly and objectively justified, and must not exceed the lower of -
(i) 1% of the amount repaid early where the period from the date on which you make the payment to the date for the discharge of your indebtedness is more than one year, or 0.5% of the amount repaid early, where that period is equal to or less than one year, and
(ii) the total amount of interest that would have been paid by you under the Agreement in the period from the date on which you make the payment to the date fixed for the end of the period under the Agreement