Tesco Personal Loan - interest rate?

yazzoo6

Hi all,
I would really appreciate someone explaining something to me about my Tesco personal loan. We took a large £35,000 loan out in November last year to complete the renovation work on our house. The interest rate was a whopping 8.3% but we had little choice at that point. We took a 2 month break before starting to pay it back so the first payment was Dec 2016 at £436 a month. We have so far made 3 payments and am about to make a 4th. We are now in the process of remortgaging our house to borrow the extra amount to now pay off the loan but have been told by Tesco that we have not paid a penny off the loan, only interest and in fact we now owe more than what we originally borrowed. 3 payments and the redemption figure is £35,400. Can anyone advise why because Tesco couldn't explain it properly to me and I would like to know whether after this 4th payment, the outstanding balance will have gone up further!


Thanks in advance,
Becky

[Deleted User]

If you took two months payment holidays, then yes, it's almost certain that your balance is now higher than the loan itself. You've only made 3 payments out of 5.

Each payment you make will bring the balance down, but remember that much of your early payments are interest and little is capital.

Definitely stop taking payment holidays.

yazzoo6

Thanks for this, is there a way of me working out what this coming months balance would look like without calling Tesco? Like an online calculator? Thanks

[Deleted User]

This seems to do what you want.

https://www.theguardian.com/money/loan-repayment-calculator-interest-rates

yazzoo6

Great, thanks for your advice

Ebe_Scrooge

Excellent advice, as always, from ZX81. But if you're looking to pay off the loan, the only way is to phone your lender. There may be early redemption charges to factor in. You need to get a definite settlement figure from the lender..