Natwest loan overpayment

mortimer89

Hi guys

I am not sure if anyone else has had this however I will soon be able to make a full payment of a Natwest loan. On this website it says as long as the overpayment is less than £8000 banks are not allowed to charge a fee, however on the Natwest website it says it will charge 58 days interest. Are they allowed to charge this fee? I don't want to pay them more than I have to!

Thanks in advance.

kirtsypoos

I recently paid off a Natwest Loan and was charged the full 58 days interest - I did ring and query it and they said it was in the terms and conditions.

mortimer89

Thanks for that.

That's what I thought however reading on here it looks like the law changed in 2011 so that lenders are not allowed the charge it. Has anyone challenged it and got their money back?

Stevie_Palimo

You will need to provide the particular part of the law that states what you believe to be the case to have any chance of this being dropped from the charges, I would imagine if in the T&C's you would have no chance of getting this dropped off the amount owed.

Nearlyold

mortimer89 wrote: »

Thanks for that.

That's what I thought however reading on here it looks like the law changed in 2011 so that lenders are not allowed the charge it. Has anyone challenged it and got their money back?

The charge is allowed - The article on this site is incorrect, whoever wrote it has misinterpreted the European Consumer Credit Directive which came into force in 2011.

All is explained here:-
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/34687/12-1264-consumer-credit-directive-guidance.pdf

In particular paragraphs 14.39 and 14.40 on page 67

Page 61 & 63 are in reference to 95A which allows for an additional charge to be made should the lender wish to do so subject to the conditions therein (which is what the article on the MSE site is based on) however - this has no bearing on the 28/58 day interest charge which arises from the rebate calculation under the still existing early settlement regulations. In a nutshell nothing in 95A is intended to derogate the early settlement calculation rules used in 94


When a customer requests a full or partial early settlement the lender has to calculate a rebate of interest charges that would have otherwise been charged if the loan had continued as before. In calculating this rebate the assumed date of the full or partial early settlement is 28 days after the request or 58 days after (at the lenders discretion) if the loan has more than 12 months to run.


The customer then has 28 or 58 days in which to make the payment, if they make the payment earlier than the 28 or 58 day deadline the lender does not have to adjust the rebate of interest calculation already made, the customer is simply giving the lender some free working capital for a period.


NB The lender is always free to offer more generous terms than specified in the early settlement regulations - as some do of course