Settling Lloyds loan early

BethRomz

Hello, first time posting but hopefully the first of many as I try and get myself out of a mess! Life has significantly changed since taking out my original £17,000 loan in 2013 at an eyewatering 18.7% (I literally had no other choice at the time and I was at such a low point I think I would have signed anything put in front of me) Fast forward almost 2.5 years, life is going well and I'm down to £13,256. 86 but yesterday had some good news which means I can pay off the balance early and save myself nearly £5000 in interest :eek:

I'm sick at the thought of paying an early settlement fee considering how much they've already had from me in interest (around £6000) . My settlement quote looks like this:

Amount outstanding (including interest due at the end of your loan) £18,109.63
Early Settlement Rebate £4,547.12
Total amount to settle loan £13,562.51

So I'm assuming there's an early repayment fee of £305.65

I was wondering if paid the remaining balance, leaving 1 month's payment outstanding would that then mean I've just paid my loan off rather than settled early.....essentially I just don't want to pay that early repayment fee is there anyway around it?

Thanks,

Beth

lee111s

BethRomz wrote: »

I was wondering if paid the remaining balance, leaving 1 month's payment outstanding would that then mean I've just paid my loan off rather than settled early.....essentially I just don't want to pay that early repayment fee is there anyway around it?

Thanks,

Beth

This exactly.

BethRomz

Oh wow its that simple?

lee111s

Pretty much, they just don't tell you.


My girlfriends Dads partner works for TSB (they kept the same policies when they separated) and we were talking about it a while ago when I explained I was overpaying my First Direct loan. I checked with First Direct and while they said they don't publish it, if a normal payment clears the loan, no penalty fee is generated.

BethRomz

ah thats good news!! thank you I was hoping there was a way around it, I'd read some conflicting advice so I was a bit unsure. Cheers Lee

BethRomz

So, the last payment has come out...yay! Instantly replaced with an interest balance of around £83 argh! I phoned Lloyd's who told me there's still £305.65 outstanding on the loan. Isn't that the settlement fee though? That I should have technically avoided paying by leaving the last months payment. Do I have anything to contest?

jonesMUFCforever

BethRomz wrote: »

So, the last payment has come out...yay! Instantly replaced with an interest balance of around £83 argh! I phoned Lloyd's who told me there's still £305.65 outstanding on the loan. Isn't that the settlement fee though? That I should have technically avoided paying by leaving the last months payment. Do I have anything to contest?

It might be that the last repayment has not yet fed through to the loan. Leave it a couple of days and look again.

BethRomz

Thanks I'll leave it a few days then. When I spoke on the phone today she said she could see the last payment of £394.09 had been made but if I wanted to close the loan I would be looking at a further payment of £305 and that I would be charged interest everyday until then! So annoying I really begrudge giving them anymore money.

jonesMUFCforever

In a couple of days you should be able to see the payment on your online banking (backdated to the date payment was received)

hourami

Morning,

Any update on this?

Thanks

Penelopa.Pitstop

Just had the same issue with Lloyds. As soon as you request early settlement quote and pay off the loan in full or most of it during 30 days from the quote, you will be charged extra settlement fee.

So do not request settlement quote, just pay outstanding amount or wait 30 days from requesting quote.

My loan wasn't closed and I called Lloyds to ask about it. I was told all of the above. I did not agree with and said that I received the letter stating that there will be overpayment on my account and it will be refunded ASAP after last direct debt. I did not receive any letter from Lloyds saying that they will take another payment from my account next month to cover this early settlement fee. In the end they closed my loan and refunded me overpayment.

Supposedly it's in terms and conditions but I can't see it on website and I'm not sure I will be able to find paper version.

Website states this:

"Early settlement quote Keep in mind there's no early settlement adjustment on Flexible Loans.
You can request an early settlement quote by:

• Logging on to Internet Banking and selecting your loan from the account overview page. .
• calling us on [URL="tel:0800%20096%201282"]0800 096 1282[/URL] (Mon–Sun 8am–10pm)
• visiting your local branch.

Important information when paying off your loan early

Depending upon the type of loan you have with us, if you repay your loan in full we may make an early settlement adjustment of up to 58 days' interest.
This adjustment of interest won't be made if your loan has less than 90 days to run to its original maturity date."


So my loan shouldn't have it in a first place.