Early settlement - Advise

XRay75

Hi all

Got a question re settling a nationwide loan early.

Got a loan which I want to pay off, I have overpaid it with a lump sum to leave a outstanding balance of £10

I called and they have me a settlement figure which was really high,, I questioned this and they say the early repayment charge is made up on 56 days interest based on the original loan amount (16.5k) not the outstanding capital balance ,, they would not budge on this but can anyone advise me if this is actually correct and I always thought the early repayment charge was based on the outstanding balance at point of settlement and not the original amount.

Thanks

[Deleted User]

It's on the outstanding balance.

XRay75

Yeah that's what I thought,, but they would not accept that at all, guess I will have to go through the long complaints process,, while they continue to take the monthly payments off me, though the next payment will clear the £10 capital balance

lewishardwick

Check the paperwork you signed for the loan. It'll stipulate how early repayments are handled.

I once got stung on a Halifax loan with something similar. Discovered I was paying off only the interest for the first year of the loan.

PeacefulWaters

lewishardwick wrote: »

I once got stung on a Halifax loan with something similar. Discovered I was paying off only the interest for the first year of the loan.

Halifax have never offered an interest only in the first year personal loan product.

The £ interest charged is more in the first year because your balance is higher.

You weren't "stung".

jonesMUFCforever

OP just let the next payment go through as normal. The loan will be in credit and they will have to refund you any overpayment.

Chill out don't bother complaining.

Mobeer

You need to read the original loan agreement to see what it says.