HP Car Loan

martincov

Took out an HP loan of £10k last November to buy a new car over 4 years.
Have been able to make lump sum reductions of £1000 on 18 January and a further £1000 on 21 February.
Had a statement from the lender showing the January payment as being applied to the loan on 15 February.
Rang them today (had not received any paperwork) and was told they had received the February amount but it was 'still in the system'. They were unable to explain why.
I don't know if there are differences between an HP Loan and an simple 'bank' loan but I can't understand, if my bank account was debited on Day 1,
why is my HP loan not credited on Day 1 (or Day 2 or 3) not weeks later thus saving me interest and shortening the term of the loan.
Am I missing something with HP Loans or am I being short changed here?

Dave_5150

Who is the HP agreement with and how are you making the overpayments?
 

Grumpy_chap

martincov said:

Took out an HP loan of £10k last November to buy a new car over 4 years.
Have been able to make lump sum reductions of £1000 on 18 January and a further £1000 on 21 February.
Had a statement from the lender showing the January payment as being applied to the loan on 15 February.
Rang them today (had not received any paperwork) and was told they had received the February amount but it was 'still in the system'. They were unable to explain why.
I don't know if there are differences between an HP Loan and an simple 'bank' loan but I can't understand, if my bank account was debited on Day 1,
why is my HP loan not credited on Day 1 (or Day 2 or 3) not weeks later thus saving me interest and shortening the term of the loan.
Am I missing something with HP Loans or am I being short changed here?

What date of the month does your normal loan payment become due?

Could it be that the extra payment made on 18th January was treated as being the next monthly payment so "ticked" against 15th February for that reason?  When you made the overpayment in January, the lender may not have known whether you were also going to make the regular payment in February.  Thus, treating the overpayment as the next monthly due payment helps to avoid the application of erroneous default markers.

Nebulous2

Making overpayments on a loan is not always as easy as it should be. I had a huge issue with the Clydesdale Bank some years ago which ended up with the ombudsman and me getting compensation. 

You may be best to talk to them, tell them you are going to overpay, and ask how you should do it.