Have Halifax duped me or have I duped myself?

foxy-stoat

What was your interest rate and original term?

Pixie5740

I don't think you have been "stung" with extra interest. I think you have paid the correct amount of interest for the 5 month period you had the original loan which is no different to the amount of interest you would have paid if you still had that loan and took out further borrowing using another loan.

By all means write to Halifax but I don't think you're due a refund. Banks don't reward loyalty so your 17 years of banking with them will probably account for diddly squat.

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.

This is the maximum that can legally be charged by way of a "penalty", if you have paid no more than this you have not been duped, just perhaps misunderstood how loans work.

SeanyP321

Pixie5740 wrote: »

I don't think you have been "stung" with extra interest. I think you have paid the correct amount of interest for the 5 month period you had the original loan which is no different to the amount of interest you would have paid if you still had that loan and took out further borrowing using another loan.

Perhaps you're right, but surely I would have reached the curve on the amortisation table sooner, and started servicing the debt rather than the interest? If that makes sense.

Nearlyold

SeanyP321 wrote: »

Perhaps you're right, but surely I would have reached the curve on the amortisation table sooner, and started servicing the debt rather than the interest? If that makes sense.

Penalty interest aside its makes no difference - you would not reach the curve any quicker whatever that means. The rate at which the debt goes down is a function of the amount outstanding, monthly payment and interest rate. If you took out a 5 year loan, repaid the balance half way through then immediately borrowed the repayment balance amount again over what had been the remaining term of the original loan (at the same interest rate) your new monthly payment would be exactly the same and the curve of the new re-borrowed loan would exactly match the curve of original loan from its halfway point onwards

SeanyP321

So, to be clear, you are both saying that had I could have taken out a loan for £10000 over 5 years, made my payments for 5 months and then taken out an additional loan of £5 grand for seven years or;

Taken out a loan for £10000, made my payments for 5 months and then taken out for £15000, settling the loan of £10000,

and would effectively make no difference in terms of the overall interest paid (apart from the fact that I extended the loan for five months)?

Nearlyold

Yes that's kind of what we are saying, the only money you have "lost out" on is the extra 58 days interest you may have been charged when you repaid the original loan. I say may because some lenders do not charge this.

andyfromotley

SeanyP321 wrote: »

And while we are bashing me for being lazy,

Wasn't bashing you mate, in a way its refreshing to see someone say it the way it was.

MUMZ2BEE

tomtontom wrote: »

You appear to have been going round in a spiral of debt for many years. Rather than trying to blame someone else I suggest you a) take responsibility for your actions and then b) post a statement of affairs on the DFW board and get some advice on better managing your finances.

se

Oh look, there's a troll!! Always moaning about others, and not being at all helpful!!

PeacefulWaters

girlatplay wrote: »

I have a 5 year loan with Bank of Scotland (which Halifax is a division of) and one of the conditions of loan is that I have to keep it for a year before I can settle it early.

This is nonsense.

What makes you think this?