Paying off TSB loan early

Nebulous2

Sometimes it just isn't worth sweating stuff like this. Some lenders make settlement charges, some don't. Some will on final settlements, but might not if you pay a lump short of full settlement. You need to factor the likelihood of having to pay these fees into which lender you choose in the first place.

However, if you have a loan at 3.5% apr, and pay off a lump of £3k, you will save £105 in interest over a year, with a charge of £17.50 at most. It is almost always better to pay off early even with a two month interest charge. 

Ascertain8365

OK I've just called TSB and paid the loan off.  I did this by first paying a lump sum which left a small two digit balance, then I waited until a couple of days after the overpayment had gone through because I wanted to make sure that their systems had all been given more than enough time to update to the new balance.  I then called TSB, asked to close the loan and was told that there's no fee to pay because I'm in the last month of the loan, and I was just asked to clear the balance.  I'm not sure what would've happened had I not called, perhaps it would've just taken the remaining balance and closed it automatically itself; but my concern was that it would take the usual monthly repayment, or take what remains plus a fee.

So, I can confirm that as of today the best way to close off a TSB loan early is to pay a lump sum to clear almost all the balance, give it a few days and call up to pay off the rest.  You will not be charged a fee so long as the balance remaining is less than 1 month's repayment.