Personal Loan - when does repayment start

Mysteek

Hi, just wondered if there is anything laid down in the 'rules' about when repayments to a personal loan should start. If it says "first payment to start 30 days from drawdown" is that a 'minimum? By law (?), are they not allowed to take the first payment WITHIN 30 days of drawdown?

For example, if I drew down a loan on, say, 10th November and I choose to make repayments on the first of the month, will the first repayment be taken on 1st December or 1st January? If 1st December, then it would be less than 30 days since draw down, but 1st January seems to be a long way off? Or could they override my wish to make payment on 1st of each month and take payment exactly 30 days after drawdown ie 10th December?

foxy-stoat

Dont think its a "law" or "rules", just whats in the agreement from the lender.

Going on my previous loans, first payment is 30 days from when the loan is received, then I changed the payment date to 1st of the month. Theres a slight calcualtion with the interest payment for that month, thats about it.

forgotmyname

In the past i have seen loans available with a short holiday at the start, nothing to pay for 2 or 3 months. Not sure if they still do that anymore?

You need to ask your lender how they work it if you take a loan out mid month but want the payment date to be the first, You may need to pay on the 1st of Dec, but only the equivalent of the number of days between the start and payment date.

eg. £200 a month, start the loan mid term and you may pay £100 for the initial payment. But you need to ask the lender they may have different terms.

Ben8282

I had a question like this few years ago when I took out a loan. I think the payment date I had chosen for the direct debit was quite close to the date when I took out the loan and I called them to ask whether the first payment would be next week or next month and they said next month and it was. Makes sense - they get more interest that way.

lee111s

I took out a loan last year, I got the funds on something like October 9th. First payment wasn't until December 1st. That was with First Direct.

HappyMJ

Mysteek wrote: »

Hi, just wondered if there is anything laid down in the 'rules' about when repayments to a personal loan should start. If it says "first payment to start 30 days from drawdown" is that a 'minimum? By law (?), are they not allowed to take the first payment WITHIN 30 days of drawdown?

For example, if I drew down a loan on, say, 10th November and I choose to make repayments on the first of the month, will the first repayment be taken on 1st December or 1st January? If 1st December, then it would be less than 30 days since draw down, but 1st January seems to be a long way off? Or could they override my wish to make payment on 1st of each month and take payment exactly 30 days after drawdown ie 10th December?

What I would do if you're not sure is borrow enough to cover the first payment and leave that extra money in the bank to cover the first payment. If the first payment is taken in 2 or 3 months you can make a manual overpayment to return the extra funds back to the personal loan provider.

Mysteek

Thanks for your replies guys. I will do a bit more digging