Early settlement???????

a2lt16v

I got a 7500 loan in September 2011 over 60months

At 8.5% the total to pay back was about 9124 I have 2433 left if I let it run to the end with the £152 payments each month.


I have 16 months left to pay and just got a quote of 2340 settlement figure including 56 days interest

What is the interest based on the original loan amount or what's left

I was expecting the figure to be around £2000

Any help I also believe if I send a lump some in I can avoid the interest but I forgot to ask how much of that final fee was made up of interest

a2lt16v

Excuse spelling my phone thinks it knows best

Tixy

Based on your figures after 44 months of payments the capital balance outstanding would be approx £2,310.
The 56 days interest would be around £32.

This http://www.theguardian.com/money/loan-repayment-calculator-interest-rates is a useful tool to show how the loan works, with more of the interest payable in the early part of the loan, and very little charged over the last few months.

a2lt16v

I thought they weren't allowed to bias the interest at the start of the loan anymore is that not the dodgy rule of 78

[Deleted User]

The interest isn't 'biased'. It's the same rate, simply charged on a larger amount.

a2lt16v

My other loan wasn't like that they decided the interest equally for each month I just presumed this one would be like that as well


Never mind least I can get it cleared anyway was just more than I had thought

[Deleted User]

The payments will have been split evenly each month. But the interest is still higher at the start of the loan, so a greater % of your repayment goes towards the interest.