Settling HSBC Loan

red_gar18

Hi.

I'm looking to settle my HSBC Loan.
I borrowed £15k at 7.9% over 60months with a 3 month payment holiday.

Total payable: £18,318.85
Current Balance: £14,960.44
Settlement Figure: £13,363.02

I just spoke with HSBC and asked if I paid off £10k today would I still need to pay the remaining amount £4960.44 and they said I would. I was under the impression the total outstanding interest would reduce with the partial payment of £10k.
With this not being the case, if I then made another payment the following month to settle the loan in full surely this would be in the region of £3200 with approximately £1800 interested rebate?

The interest must surely be rebated if I decide to pay it off over 2 payments instead of just one lump sum, the £13,363.02.

Thanks

red_gar18

Monthly payments of £305.31

[Deleted User]

You need to find out your actual current balance, as it can't be £15k if the settlement is £13k.

The current balance will include future interest, rather than just showing the outstanding capital.

red_gar18

Deleted_User said:

You need to find out your actual current balance, as it can't be £15k if the settlement is £13k.

The current balance will include future interest, rather than just showing the outstanding capital.

The current balance is the same as in my original post £14.9k. Settlement figure of £13.3k.

Just checked over the phone and when logging into online banking the outstanding balance is shown. Thanks

red_gar18

As you say the £14.9k is inclusive of interest. The settlement figure is of course the interest rebated but maybe include a month or two of interest for settling.

[Deleted User]

The current balance won't be 14k if the settlement is lower. The settlement will always be higher. HSBC systems tend to use balance to end of term, instead of actual current balance.

You'll need to ask them for your actual current balance, or alternatively, calculate it yourself from the payments so far and accumulated interest.

If it were your current balance, you'd need to pay the 10k, the £5k and ongoing interest on top.

[Deleted User]

red_gar18 said:

As you say the £14.9k is inclusive of interest. The settlement figure is of course the interest rebated but maybe include a month or two of interest for settling.

That means your current balance is around £13.1k, so you'll have just over 3k remaining once you've paid the 10k, though still generating interest.

red_gar18

Please see attached image. This is what was sent across when I asked this morning for a settlement figure. I have since paid a part payment of £13,000 today trying to avoid additional interest for settling. Out of curiosity after I paid the £13k, I asked for another settlement figure and suddenly I've saved £160.70 in interest.

I also asked out of curiosity how much interest they were charging on the £13,363.02 settlement figure and they wouldn't answer the question properly, every answer was a like speaking to a politician.

red_gar18

Please see attached. This is settlement figure later today after paying the £13k part payment.

[Deleted User]

That looks about right.