Santander loan repayment help

deefadog

I was hoping someone would know the answer -

I have a loan with Santander and i can pay off as many lump sum amounts when i want, but the amount i pay each month remains the same, not a problem, but what happens for example if i pay this a year earlier than expected, will i get some sort of rebate? as i would if i settled the whole loan at once?

[Deleted User]

You will just pay less in the long run. They don't actually send you any money back.

deefadog

Hi zx81, thanks for the response.

Sorry, my brain can't process this, maybe because it's a Friday

But, if the interest is added at the beginning of the loan and i pay a fixed amount each month regardless if i pay extra then i don't see a benefit of paying off early.

if i rang up tomorrow i would get a settlement figure less than the outstanding amount for paying off early.

[Deleted User]

You'll continue to make the contractual payments, but you'll make fewer of them, to reflect the capital repayment and the lower interest charges as a result.

redpete

deefadog wrote: »

But, if the interest is added at the beginning of the loan and i pay a fixed amount each month regardless if i pay extra then i don't see a benefit of paying off early.

They don't really add the interest at the beginning. They probably add the interest at the end of every month based on the daily outstanding balance during that month. It looks like it's added at the beginning because they will give you a figure of how much you would pay back *if* you pay just the standard monthly payments for the whole loan period.

if i rang up tomorrow i would get a settlement figure less than the outstanding amount for paying off early.

Correct, hence proving that you do save money. In many cases the lender will keep the monthly payments the same but the period of the loan will reduce.

deefadog

Thanks both!

Yes i was forgetting the interested is added each month! - Brain freeze!

anders170

Hi I had a Santander loan which I found I could pay off early, I just called them and explained what I wanted to do and that was it. I got charged for just the interest during the time I had the loan before ending it rather than the full term, saving quite a lot of money. I found them a good bank to use for loans.

Marie1968

My mum and dad lent my sister 20,000 pounds from there mortgage 10 years ago to put a deposit on her own property she lost the house and now mum and dad have no money to pay it off in two years time I'm at my wits end anyone know any information please

ViolaLass

anders170 wrote: »

Hi I had a Santander loan which I found I could pay off early, I just called them and explained what I wanted to do and that was it. I got charged for just the interest during the time I had the loan before ending it rather than the full term, saving quite a lot of money. I found them a good bank to use for loans.

Well yes, it's standard to pay interest only when the money is actually being borrowed.

Tixy

Marie1968 wrote: »

My mum and dad lent my sister 20,000 pounds from there mortgage 10 years ago to put a deposit on her own property she lost the house and now mum and dad have no money to pay it off in two years time I'm at my wits end anyone know any information please

Hi

It is best to start a new thread for a new topic.

Is sister in a position to start repayments towards the loan from parents?

Is parent's mortgage interest only? Is it only the £20k that is owed or do they owe any more on their mortgage?
Is 2 years time the repayment date of the mortgage?

What options have they explored so far?
e.g. will they be able to extend the mortgage and perhaps also switching to a capital repayment mortgage? would they be able to afford the repayments if they choose that option? are parents still working?