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Early loan repayment

I have just bought a new car and took out the finance from the car dealer. When i got home a friend advised me to look into taking out a personal loan for the same amount which turned out to be a lot cheaper. I was accepted with the new loan straight away and rang the original company to say i wish to cancel the original loan. They told me i that there is no "cooling off" period, i thought it was 14 days and basically the settlement figure they have quoted me is more than the original loan.
Could some one advise me if this is correct or do you in fact have a "cooling off period" with a loan.
Thanks
Helen

Comments

  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    If you signed the finance deal at the dealership then there is no cooling off period unless of course your specific T&Cs provide for this.
    The 'penalty' for early settlement should be no more than two months interest assuming you didn't sign up for PPI.
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