Early Settlement on Loan

allanpool

I have a loan of £15000, 19.4% APR, over 60 months, paying £379.78 per month, overall repayment of loan £22786.80.


I am 8 months in to the term of the loan and can now afford to repay and settle early.


Can anyone tell me what I will be charged to settle early and how much I am likely to have to pay back.


Thanks

Paully232000

I am going to state the obvious here, but have you phoned your loan company and asked them this question. Usually, with finance I have had in the past I have phoned the company, asked for a settlement figure and this is usually valid for 30 days.

KRB2725

http://www.financecalcs.co.uk/Calcs/Settlement.php

according to this it's around £14077.

allanpool

Hi, I know its obvious but I just wanted to understand whether there was anyone out there who could tell me (from experience) what I am likely to be charged before I phone them

allanpool

Thanks for your reply!


May I ask how you worked this out.......I am with Lloyds

Paully232000

http://www.lloydsbank.com/loans/existing-loan-customer.asp

Have a look here and it details what you have to do, and that you will be charged up to 58 days interest for paying early.

You can pay online ifregistered with internet banking, or phone them.

jonesMUFCforever

allanpool wrote: »

Thanks for your reply!


May I ask how you worked this out.......I am with Lloyds

How did you apply for this loan - in branch or online?
If it is the newer flexible loan there will be no early settlement fee.
These were first offerd in branches - don't know if you got the same deal online.

Nearlyold

The Consumer Credit (Early Settlement) Regulations 2004 allow lenders to charge up to 58 days interest in the event that a customer decides to repay their loan in full early. Are there any lenders that don't charge at all?

PeacefulWaters

Nearlyold wrote: »

The Consumer Credit (Early Settlement) Regulations 2004 allow lenders to charge up to 58 days interest in the event that a customer decides to repay their loan in full early. Are there any lenders that don't charge at all?

Lloyds and Halifax.

But not on all loans.

marty2be2000

From what I recall with Lloyds you can avoid all the final settlement fees, but you need the settlement figure from the bank first. Either get this in branch or from your online banking.

Once you have the settlement figure, pay off all the loan except £20 so the settlement figure is now £20. Assuming your monthly DD is greater than this amount, the bank will collect the final £20 by DD on your normal monthly payment date. The amount may increase due to interest, you need to make sure the loan balance is less than the usual DD amount.

The key to avoid the early settlement fee is to let the bank collect the final payment, and not you pay it in full.

katiasm

I don't know what your settlement fee will be, but from 2 recent experiences I found it to be more financially viable to wait until just after 1/2 the repayments were made, before paying off completely.