Warning about AA Loan Early Repayment

AndyHanners

DrEskimo said:

It also would be very coincidental that it worked out to the remaining balance to the pound.

Check your T&C for the agreement, as the information you have relayed to us doesn't seem correct. I agree with raising this to the financial ombudsman.

Getting a bit fed up with being accused of not supplying the correct information to be honest

AndyHanners

[Deleted User] said:

They don't use the first two months interest. 

They calculate two months interest on the balance at time of settlement.

No matter when you clear the loan, you need to pay the full amount outstanding at the time plus two months interest.

That makes no sense. it would end up costing me more to settle early

DrEskimo

AndyHanners said:

DrEskimo said:

That's just because there was month between the two letters, and the OP had made a further payment of £314.86.

They are not saving anything according to the complaints handler, and that shouldn't be the case.

I don't know what the amount borrowed or what the APR was, but if it was £15,000 borrowed at 9.9%APR over 60months, and the OP was looking to settle after 48months, they would be saving something like £135 in interest before any fees (which would be about £60 in this example).

Yes it was exactly that. What do you reckon, is it worth the hassle of raising a case for £75?

Up to you mate. I certainly would, as it's not fair that both the call handler and the complaints handler have potentially misinformed you, so it's not uncommon to have additional 'goodwill'.

I would carefully check your T&Cs first though just to make sure your particular agreement wasn't subject to different regs. From what you've described, that this is a standard regulated unsecured loan, none of the information you have been provided by AA seems accurate.

[Deleted User]

AndyHanners said:

[Deleted User] said:

They don't use the first two months interest. 

They calculate two months interest on the balance at time of settlement.

No matter when you clear the loan, you need to pay the full amount outstanding at the time plus two months interest.

That makes no sense. it would end up costing me more to settle early

No it wouldn't, unless you settled with less than 8 weeks remaining.

Thousand21

Bit late to this thread but speaking from 1st hand experience I would say you are owed a rebate of some sort. I recently received an email from AA Loans to inform me that I am due a rebate from a loan I paid off early, roughly 4/5 years ago.the amount I paid to settle was around 4k. They advised I am due around £370 as a rebate and £170 on top as compensation, apparently the £170 is subject to a basic rate tax deduction, so my final rebate will be just over £500. I would get in touch with them to advise them of the overpayment you made and that you want them to raise a complaint in relation to this. Usually anything that negatively financially impacts you as the consumer would be a big no no with regulators, so if they reject it again and deadlock the complaint I would take it further. Alternatively you could possibly wait another 2/3 years and see if they get in touch about the rebate like they have with me 😄 hope this helps 

BoGoF

Thousand21 said:

Bit late to this thread but speaking from 1st hand experience I would say you are owed a rebate of some sort. I recently received an email from AA Loans to inform me that I am due a rebate from a loan I paid off early, roughly 4/5 years ago.the amount I paid to settle was around 4k. They advised I am due around £370 as a rebate and £170 on top as compensation, apparently the £170 is subject to a basic rate tax deduction, so my final rebate will be just over £500. I would get in touch with them to advise them of the overpayment you made and that you want them to raise a complaint in relation to this. Usually anything that negatively financially impacts you as the consumer would be a big no no with regulators, so if they reject it again and deadlock the complaint I would take it further. Alternatively you could possibly wait another 2/3 years and see if they get in touch about the rebate like they have with me 😄 hope this helps 

Well, just 20 months late.