Penalty charge/fee for paying off an interest free debt early?

DjangoUnchained

I have what they call a managed loan from hsbc for a card i got into difficulty a few years ago. They kindly agreed to freeze the card and the interest and let me pay it off monthly over a few years. I have about 20 months left to go at £80 a month, paying no interest until its cleared. I could easily pay it all off today but in their times and conditions it does mention an early payment clause. I assume this is to cover interest baring loans but as im not paying interest anyway would this apply. as surely its only beneficial to them for me to clear it as soon as possible,.

[Deleted User]

The ERC could be based on the contractual interest rate, even if you're on a temporary arrangement, but it depends on the precise wording and nature of the arrangement.

Yes, it's beneficial for you to repay them.

DjangoUnchained

Deleted_User said:

The ERC could be based on the contractual interest rate, even if you're on a temporary arrangement, but it depends on the precise wording and nature of the arrangement.

Yes, it's beneficial for you to repay them.

to be clear. Im happy to pay it all back providing they dont add interest but otherwise i may as well just pay them monthly with no interest.

[Deleted User]

That's fine. Whatever suits you - it's entirely your choice. 

DjangoUnchained

Deleted_User said:

That's fine. Whatever suits you - it's entirely your choice. 

yes, i know its my choice. i was just trying to ascertain whether i would be stung for early redemption and if so i would save myself money by dragging out the loan. I know i could try and ask the bank but i dont phone them (wastes too much time getting through) 

[Deleted User]

As I said - it depends on the precise nature of the arrangement and the contract wording.

Maff332020

I'm more of a lurker than a writer however zx81...The question was pretty obvious regarding if he/she could pay it off now for equivalent amount or expect to be stung by further charges. 
I guess it also depends on how much the further charges are really?, If you want it gone for good then just pay up and be free. 
money comes and goes. 

Matt8888

A series of slight bizarre replies? Anyway, the bottom line is that nobody here will know whether they would charge you a penalty or not. How could they know the terms or whether the bank might agree to change them? I appreciate you don't want the hassle of trying to get though to your bank, but only they can answer you question.

A_Random_Man

Maff332020 said:

I'm more of a lurker than a writer however zx81...The question was pretty obvious regarding if he/she could pay it off now for equivalent amount or expect to be stung by further charges. 
I guess it also depends on how much the further charges are really?, If you want it gone for good then just pay up and be free. 
money comes and goes. 

And zx81 quite rightly said it depends on the terms and conditions, I don't get what you are trying to point out zx81 answered the question promptly, you also agree with zx81 further down by saying "it depends on how much the further charges are". 

Mickey666

I think the point Maff was trying to make was that of course "it depends" but because no one on here can possibly know for sure then it's not a very helpful answer, even if it is technically correct.  Might have been more useful to point out that the only way to find out for sure is to contact the bank and ask them.

We get a lot of these sorts of questions on here, ie a question about the terms of a contract that no one on here has any sight of the T&Cs and therefore can only ever answer "it depends", which is not much help.  Posters should realise that unless they post a copy of the entire agreement/contract then no one on here will be able to give them a definitive answer - not even an expert in contract law, because they simply don't have the necessary information to give a definitive answer.

I suppose it's quicker to post on here than it is to phone the bank, but it's actually just a waste of time when only the bank will be able to give the definitive answer.

DjangoUnchained

A_Random_Man said:

Maff332020 said:

I'm more of a lurker than a writer however zx81...The question was pretty obvious regarding if he/she could pay it off now for equivalent amount or expect to be stung by further charges. 
I guess it also depends on how much the further charges are really?, If you want it gone for good then just pay up and be free. 
money comes and goes. 

And zx81 quite rightly said it depends on the terms and conditions, I don't get what you are trying to point out zx81 answered the question promptly, you also agree with zx81 further down by saying "it depends on how much the further charges are". 

Mickey666 said:

I think the point Maff was trying to make was that of course "it depends" but because no one on here can possibly know for sure then it's not a very helpful answer, even if it is technically correct.  Might have been more useful to point out that the only way to find out for sure is to contact the bank and ask them.

We get a lot of these sorts of questions on here, ie a question about the terms of a contract that no one on here has any sight of the T&Cs and therefore can only ever answer "it depends", which is not much help.  Posters should realise that unless they post a copy of the entire agreement/contract then no one on here will be able to give them a definitive answer - not even an expert in contract law, because they simply don't have the necessary information to give a definitive answer.

I suppose it's quicker to post on here than it is to phone the bank, but it's actually just a waste of time when only the bank will be able to give the definitive answer.

i appreciate without seeing the original contract its just a guess. It just struck me as odd that you could be penalised for paying a loan off early when no interest was charged anyway. ie the bank was not losing anything (in fact gaining) by such action. i dont want to waste anyone's time further with this so i will try and message or call my bank on monday.