118 118 loan

GrantLee80

Hi there,

I took out a loan in May 2017 with 118 money for £4,153 (31%APR) This was a two year loan, however I am able to pay it off now. I have made two payments of £232. On calling 118 yesterday I was told the Early Settlement figure would be 4000.66 ??? I am confused that I have paid £464 and yet only paid 153 in two months. Also the account shows I owe 5400 ?? The caller stated the ESF is based on this figure and that I will be charged 58 days interests which it does state in my contract. However I am confused

1. Why they class me as owing 5400, are they able to calculate this way ?
2. How can I save as much money as possible

I have put in a complaint and contacted the FO.

Please hellppppp !!!!!

[Deleted User]

They're correct. Most of your early payments go on interest.

The 5400 figure is if you let the loan run full term.

Save money by paying it off ASAP.

Hope that hellllpps.

MABLE

Not sure if this is the same thing but a few years ago I took out a loan with Lloyds. I wanted to pay early so if the balance shown was £5000 I would pay in £4999 and then ask for the settlement figure and this was based on the outstanding amount.

GrantLee80

Thank you, is there a way u can get away with not paying the ESF ?? I was thinking of paying £3500 as a lum sum ?? Then paying the rest in a further 3 payments ???

[Deleted User]

That may work.

dresdendave

GrantLee80 wrote: »

Hi there,

I took out a loan in May 2017 with 118 money for £4,153 (31%APR) This was a two year loan, however I am able to pay it off now. I have made two payments of £232. On calling 118 yesterday I was told the Early Settlement figure would be 4000.66 ??? I am confused that I have paid £464 and yet only paid 153 in two months. Also the account shows I owe 5400 ?? The caller stated the ESF is based on this figure and that I will be charged 58 days interests which it does state in my contract. However I am confused

1. Why they class me as owing 5400, are they able to calculate this way ?
2. How can I save as much money as possible

I have put in a complaint and contacted the FO.

Please hellppppp !!!!!

Now that the situation has been explained to you and you've realised 118 have done nothing wrong, perhaps you should contact the FO to withdraw your "complaint" so they don't waste resources on a wild goose chase.

Shakin_Steve

As far as I can see, your loan should run till May 2019. If you pay it off before the, you have paid it off early. I don't see why people expect the rules to be changed just for them, early settlement fees exist on almost every loan.

PeacefulWaters

What's it got to do with the Foreign Office?

iolanthe07

This comes up regularly. So many people just don't seem to understand how loans work. OP, in the early stages almost all the payments go towards interest, with very little coming off the principal, especially with an eye watering interest rate of 31% APR. Only in the later stages of repayment will you see large monthly reductions in the principal. If you settle early, allowamce will be made, but there is often a one or two month penalty.

Sncjw

Fo is Financial ombudsmen

MABLE

Sncjw wrote: »

Fo is Financial ombudsmen

There was I thinking Boris was going to be involved. :rotfl: