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Sainsbury's Loan - Overpayments

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SimonRoberts
SimonRoberts Posts: 2 Newbie
edited 11 March 2019 at 11:57PM in Loans
Hi all.... wondering if someone could help me understand something.

I've a loan for £24k with Sainsbury's over 7yrs. Pay 2.90% and repayments are £316 (ish). I'm a year and 5 months into the loan

I've started paying additional £316 per month overpayments in the hope to half the term now I've some free cash.
I understand interest is charge to the additional loan etc etc and I also understand that each month interest is paid.
HOWEVER, if I am paying £316 as an overpayment - why is it that I'd getting thank you letters for only paying £285. Is my overpayment also paying interest?
I generally believed that paying £316 overpayment would result in £316 coming off the remaining balance.

I was recently overpaying my mothers loan with Tesco's and for example, if I paid £200 as an overpayment. £200 would come off the balance.

I had hoped Sainsbury's and Tesco's would have operated similarly.

Thank you

Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Overpayments all come off the capital.

    Clarify the letters with them.
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    Its the interest charge on the overpayment - quite normal, well it was with my Natwest loan when I was making overpayments....maybe Tesco do it differently.
  • TrickyDicky101
    TrickyDicky101 Posts: 3,529 Forumite
    Part of the Furniture 1,000 Posts
    58 days' interest on the overpayment would only be c.£1.50 ish so I don't think it's that. As zx81 says, ask the lender.
  • Simple Answer - Sainsbury do not know so if anyone else see's this..... it might be worth giving them a quick call. They also sent me the wrong balance so clearly the automatic overpayment letter in some cases isn't working that well.
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