Early settlement of loan.

lynton082

Hi i am a newby to this forum. I am buying a car on hire purchase from Honda finance.
I have contacted the company to pay a lump sum off my loan.
On a loan with a bank i was allowed to retain the payments amount and just reduce the term.
Honda finance will only allow me to reduce the term and the payments.
By doing this Honda finance are not allowing the full benefit of paying off a lump sum.
Is this legal?

[Deleted User]

Yes, they are, but you could make additional payments to keep the sum the same and reduce the term.

Nearlyold

Lenders must offer either a reduction in term or reduced payments or both. However under the legislation it is entirely up to the lender which option or options to offer.