Satsuma loan

MarkR82

Hi, registered today to ask a question about a £750 loan I took out with Satsuma on the 20th Aug. I called them today to ask what the figure would be for early repayment today and was told it would be £918. Having already paid £237 in my first instalment I was shocked that I would have to pay such a large amount to clear the loan but was advised by the agent on the phone that Satsuma loans are repaid by repaying the interest first. Now seeing as the interest is surely based over a 6 month period, I’m being led to believe that I would be saving just over £200 by the agent. It was apparently clear in the terms that I signed, though I missed that part. Is it legal to repay interest before repaying any part of the loan? Or should repayments be split between interest and loan amount? At the end of the day, having already made a payment I’m confused why I still owe £132 more than I originally borrowed. Help please ☹️

MarkR82

Apologies, I owe £168 more than I borrowed

[Deleted User]

The agent was wrong. You're not repaying the interest first.

You repay capital and interest with each payment - mostly interest in the early stages. They can also add up to two months interest as early settlement.

The quicker you settle, the more you will save.

Fireflyaway

This is normal with sub prime and payday loans. They don't want you to pay it off early. Get rid of it as soon as you can, every bit saved in interest is a bonus.

Caz3121

MarkR82 wrote: »

Apologies, I owe £168 more than I borrowed

you borrowed £750, being repaid at £237 per month for 6 months so you would be paying back £1,422 with a total of £672 interest (265%!)
your first payment would have paid about £72 off the loan with the remainder being the interest
After a month there is £678 left on the loan amount + you would pay whatever their early settlement is...often 58 days interest
If you add the £918 to the £237 you will pay in total £1,155 instead of £1,422 if you pay to the term end so you save £267 in interest

sourcrates

Agree with above, all the financial details are on there website and are clearly displayed.

Loan amount £750 (over 6 months)
Monthly repayment £237.00
Interest £672.00
Total to repay £1,422.00

Representative 535%​ APR. !!!!