Paying off a high interest loan early

Bigglad132

Hello around 7/8 months ago me and my partner took out quite a high interest loan for £2000 due to bad credit. Luckily we are in a position now with fixing our finances are now able to pay it off early. So I requested the papers to find out how much it would be. The letter I got is as follows and can anyone explain to me about the rebate they have mentioned in the letter. So our outstanding balance is £3487.04 Amount of rebate £1544.17 and settlement figure is £1942.87. Would we actually be entitled to that much of a rebate? Thanks.

Bigglad132

I should add it says on the letter beside the rebate amount !!!8220;if applicable!!!8221; .

Codymcmc

can you post the letter up removing any identifiable parts, who was the loan with, What was the APR.

Bigglad132

Can’t attach any links or pics due to being a new user to the forums here. The loan was with everyday loans. (Awful I know) the apr was astronomical as well. I’ll have a look see if I can find it not sure of the top of my head.

Codymcmc

Hey im one of a very few that will not judge you on here, not at all.

What are your current monthly repayments on the 2k and over how long.

Gaz83

The rebate doesn't mean you'll have that money refunded, it's just the difference between the interest you will have paid overall and the interest you would have paid had the loan run its course.

Bigglad132

The loan itself was over 2 years I’m paying £206 per month.

Codymcmc

So your total repayable would have been £4944 had it run its course, does that sound right, And you have paid back around £1600 ish so far over the last few months.

On that basis yeah, they are saying to finish the loan now the total figure you have to pay them is £1942.87

Bigglad132

Yeah that sounds spot on. The settlement amount sounds right to me, that!!!8217;s what we expected it to be. I was just curious about the !!!8220;rebate!!!8221; Amount as they!!!8217;ve said it could be £1544, but seems too good to be true. Thanks for your replies.

Codymcmc

That £1544 is the interest you will save by settling the loan early, it won't be given back to you.

foxy-stoat

108% interest loan - good job you can settle it now before you have paid too much interest - well you have paid £1361 in interest. Hopefully you wont need to take out this type of loan again.