Natwest early settlement fee confusion

anamenottomention

In December 2016 we took out a personal loan for £13k with Natwest over 5 years with 11% APR. We pay £279 per month and the current balance is £8880. We have requested a final settlement fee, as we are in a position now to pay off in full.


I understood that under the Consumer Credit Act you should get a rebate of any interest and charges you’ve paid. I am aware also that the lender has a right to charge up to 2 months interest, but was under the impression that this still would mean we were better off on the whole, especially considering we still have almost 3 years of the loan outstanding.


Natwest have given a final settlement figure of £9038. This would appear to be what we owe still plus the 2 months interest. However, there is no rebate made for interest and charges paid. Are they trying to pull a fast one here?

poppasmurf_bewdley

Why on earth would you get a rebate on interest and charges already paid?

You've only paid interest on the money whilst it's been in your possession. And any charges would have been incurred during the course of the loan.

How did you come to understand any different? Who gave you the impression otherwise?

Browntoa

No , they are not

foxy-stoat

No they are not, it sounds about right.

You are saving about £1000 - how have you not worked that out?

Pixie5740

anamenottomention wrote: »

In December 2016 we took out a personal loan for £13k with Natwest over 5 years with 11% APR. We pay £279 per month and the current balance is £8880. We have requested a final settlement fee, as we are in a position now to pay off in full.


I understood that under the Consumer Credit Act you should get a rebate of any interest and charges you’ve paid. I am aware also that the lender has a right to charge up to 2 months interest, but was under the impression that this still would mean we were better off on the whole, especially considering we still have almost 3 years of the loan outstanding.


Natwest have given a final settlement figure of £9038. This would appear to be what we owe still plus the 2 months interest. However, there is no rebate made for interest and charges paid. Are they trying to pull a fast one here?

Where....how....did you get the impression that if you settled the loan early you would be entitled to claim back the interest you had paid to date?!

Caz3121

£13k loan....60 monthly payments of £279 = £16,740 if you were to make all payments as planned
If paid 24 payments then future payments if paid as planned would be £10,044 but you save the future interest so are due to pay £1000+ less due to interest saved...completely normal..no thieving (I think you possibly don't understand how loans work)

anamenottomention

Thank you all - both for making me feel a complete idiot (rightfully so) and for explaining!

anamenottomention

In relation to where I got the info on a rebate, this was here:


citizensadvice.org.uk/debt-and-money/borrowing-money/your-rights-when-you-borrow-money/#



where it says: If you want to pay off a loan early, under the Consumer Credit Act you should get a rebate of any interest and charges you’ve paid.

nick74

anamenottomention wrote: »

In relation to where I got the info on a rebate, this was here:


citizensadvice.org.uk/debt-and-money/borrowing-money/your-rights-when-you-borrow-money/#



where it says: If you want to pay off a loan early, under the Consumer Credit Act you should get a rebate of any interest and charges you’ve paid.

I've re-read that on their website a couple of times just to see if somehow the context of it is being misunderstood, but no I think it's just a straightforward mistake. Quite worrying to see an error like that on the CAB website!

System

There's a link at the bottom of the page to contact them if you think there is anything wrong with the page, I've done that and suggest others do.

https://www.research.net/r/J8PLH2H?p=/debt-and-money/borrowing-money/your-rights-when-you-borrow-money/

nick74

Tarambor wrote: »

There's a link at the bottom of the page to contact them if you think there is anything wrong with the page, I've done that and suggest others do.

https://www.research.net/r/J8PLH2H?p=/debt-and-money/borrowing-money/your-rights-when-you-borrow-money/

Yes, me too.