RBS Loan Overpayments

psychopathbabble

Apologies if this has been posted before, I have searched and can't find anything.

We are about to take out a loan with RBS to consolidate our debts etc etc (yes I know, but it's the right thing for us at this time). However, we are taking it out with the intention of overpaying by at least double most months. Reluctant to up the monthly payments incase we have a tighter month.

Can anyone tell me the consequence of overpayments? I saw somewhere that it's a charge roughly 1% of the overpayment, but when I called RBS they wouldn't/couldn't help me until I call to make the payment on the loan and then they can tell me if there is interest to pay.

What a joke... I had a loan a few years ago with Lloyds and there was no issue with overpayments!

Thank you

[Deleted User]

Your t&cs will tell you if there is any charge for overpayments. I'm not aware of it being a common practice though.

psychopathbabble

Thank you... we are waiting for the paperwork, will have a look.

Rolandtheroadie

My understanding of it is that you'll call up to pay extra, and you will be charged 2 months interest on any overpayment you make.

Any overpayment wont change your monthly payment.

psychopathbabble

Ah see I understood it as the 58 days interest on an early settlement... and I found this on the main site:


"Early part-repayments are allowed

If your loan was taken out on or after 1 February 2011, you can make partial overpayments on your loan. Banks are still allowed to charge you, but only up to 1% of the amount repaid (if the loan is for over a year) or 0.5% (if under a year)."


So I understand that as 1% of whatever we overpay each time? I was just asking RBS for clarification but they wouldn't tell me anything.

psychopathbabble

PS I don't want to reduce any monthly payments, we just want to overpay as often as we can to shorten the term of the loan.

chambta

psychopathbabble wrote: »

PS I don't want to reduce any monthly payments, we just want to overpay as often as we can to shorten the term of the loan.

You need to get hold of someone in your branch who knows what they are doing. Overpayments will automatically reduce the payments unless it is transferred in a particular way.

psychopathbabble

chambta wrote: »

You need to get hold of someone in your branch who knows what they are doing. Overpayments will automatically reduce the payments unless it is transferred in a particular way.

Ok thank you. I don't know why it is so difficult for the bank to answer my question!

I also asked if we could increase it slightly and reduce the term a little but he said we would need to reapply... which I understand, but if we apply again online then it'll look like we are trying to take two loans out! I'm sure if we spoke to the right person they could take it to the underwriters and get them to look at it.

Frustrating.