Tesco Loan - early repayment fee

jonesMUFCforever

Smellyonion wrote: »

Tesco front loan their loans for having fixed monthly repayments.

You will repay 16k plus 2x months @3%. Which i calculate to be around £60. Dependent on how they calculate their interest.
Ask for the settlement figure.

I don't think any lender front load the interest any more - they will charge daily interest on the amount outstanding and charge you monthly.
My calculation is £16000 at 3% = £480 annually. Divide that by 365 and multiply by 58 gives you around £76.
It will be less if you make one monthly repayment before paying it off.

iolanthe07

Have you actually been accepted for 2.95% APR? This low rate will only be offered to 51% of successful applicants, so be prepared for the possibility that Tesco come back with a higher APR.

Smellyonion

They front load and then rebate if you pay off early. Makes sense for loan management purposes. I should know because I have one. The account opened as a balance with total term interest included from day1.


your calculation are likely wrong because you failed to compound the interest daily...as I said, depends on how they calculate it but it will be around that figure.

jonesMUFCforever wrote: »

I don't think any lender front load the interest any more - they will charge daily interest on the amount outstanding and charge you monthly.
My calculation is £16000 at 3% = £480 annually. Divide that by 365 and multiply by 58 gives you around £76.
It will be less if you make one monthly repayment before paying it off.