Discharge Fees when paying off a loan on the date it is due

Dynamic_Panda

I have a probably daft question but I am trying to make sense of it all.

We took out a loan with Ocean Finance in September 2009 which was secured against the property so in effect treated like a mortgage.............the last payment is due on 04 March this year.

Since we took out the loan the company has changed hands twice and is now with Prestige Loans.....we have paid every payment on time and never missed one or incurred any fees of any description............

So imagine our surprise when we got a letter advising that we would have to pay a discharge fee on completion of the loan payments...........nothing was ever mentioned about this when we took it out as we were advised all fees were included in the monthly payments.........

I rang them and asked them why we were being charged this and subsequently to show this in the copy of our agreement........Well having read it it is very contradictory............it states that on the front there is an early repayment fee of £150 but this is not early repayment.......and they have highlighted early repayment on the fees schedule..........

I am going to phone them again tomorrow and explain again it is not an early repayment fee and we have never paid a discharge fee for any previous mortgage we have paid off early..............

Where do I stand with this.................any advice appreciated............

jonesMUFCforever

It is a fairly common term for these kind of loans BUT it is up to them to confirm that you were informed at the time you took out the loan.
The fee is to cover the Land registry fee and clerical work to take the legal charge off your property.

PeacefulWaters

It's a normal sort of fee for secured lending but if they are positioning it as an early settlement charge complain.

If you don't get instant success pay it. Complain again and escalate to the FOS if it's not reimbursed.

I don't recommend withholding the money as that would delay the clearing of the loan. Seek to recover it later if they can't demonstrate where it is in your original agreement.

Dynamic_Panda

jonesMUFCforever wrote: »

It is a fairly common term for these kind of loans BUT it is up to them to confirm that you were informed at the time you took out the loan.
The fee is to cover the Land registry fee and clerical work to take the legal charge off your property.

The problem is that they have passed it to another company who then passed it to the current one so there is no way of proving it............

All their paperwork indicates that we are paying it off early.........we are not its the final payment..........I accept there are discharge fees but we were told they were included in the monthly payments...........

I have just spoken to them and advised that I want to raise a complaint about not being told and the incorrect information in their correspondence.............we are making the final payment as normal then if we have to pay this it will be paid the following month...............

Its just infuriating finding out about it when we were told it was included............

jonesMUFCforever

Dynamic_Panda wrote: »

The problem is that they have passed it to another company who then passed it to the current one so there is no way of proving it............

All their paperwork indicates that we are paying it off early.........we are not its the final payment..........I accept there are discharge fees but we were told they were included in the monthly payments...........

I have just spoken to them and advised that I want to raise a complaint about not being told and the incorrect information in their correspondence.............we are making the final payment as normal then if we have to pay this it will be paid the following month...............

Its just infuriating finding out about it when we were told it was included............

It is very unlikely that any ''discharge fees'' would be included in the monthly repayment as the discharge only happens when the loan is repaid.
Have a look at any mortgage offer/costs and you will find similar charges.
To me it would be a small price to pay to get their charge over the property removed and be freeee!

PeacefulWaters

Dynamic_Panda wrote: »

The problem is that they have passed it to another company who then passed it to the current one so there is no way of proving it............

All their paperwork indicates that we are paying it off early.........we are not its the final payment..........I accept there are discharge fees but we were told they were included in the monthly payments...........

I have just spoken to them and advised that I want to raise a complaint about not being told and the incorrect information in their correspondence.............we are making the final payment as normal then if we have to pay this it will be paid the following month...............

Its just infuriating finding out about it when we were told it was included............

I would expect the fee to be on your original agreement.

If it isn't, and there really is no way for them to prove things, you can look forward to the FOS supporting you if the lender doesn't back down first.

Dynamic_Panda

jonesMUFCforever wrote: »

It is very unlikely that any ''discharge fees'' would be included in the monthly repayment as the discharge only happens when the loan is repaid.
Have a look at any mortgage offer/costs and you will find similar charges.
To me it would be a small price to pay to get their charge over the property removed and be freeee!

I agree with you about that however we have never paid a discharge fee when we cleared a mortgage before to my knowledge...........We had a secured loan before and cleared it early so yes we knew there was a charge in that case but we were told that was in the final payment which makes sense...........there is nothing in the paperwork that I can see about a discharge fee at all..............

Even when we paid off the Mortgage to move here and took out another one we never paid a discharge fee on top and have changed mortgage providers since and to my knowledge have never paid one..............Unless it has been included in the legal fees for the change of provider............and they pay it.............

I will just wait and see what happens.............

Oh and plus points...........where they keep highlighting about early repayment they have admitted they got that wrong............

Dynamic_Panda

Update............as there is no way they can prove what the original company told us and also the fact that they are insistent that we are repaying it early (they have admitted they got that wrong) even though it is the last payment they have agreed to waive the fee and will pay it themselves............

Happy with that..............