Settlement for clearing loan early

Confused_Newbie

Hi

I am hoping someone can give me some advice, will try to keep it short! Due to marriage breakdown I find myself in a position where I have funds available to clear a loan I currently have with Tesco. Loan has approximately 6 months left and payments are £400 per month. I have never missed a payment or had any late payments. I know there is a chance they may add fees for early repayment (I need to look into this) but equally would it be worthwhile seeing if they would come to any arrangement of a reduced final figure for me to clear it completely now? 

Thank you in advance for any help or advice you can throw my way! 

sourcrates

Settlement offers are usually only made, and accepted on old defaulted accounts.

You say you have never missed a payment, so are still contracted to repay the full outstanding amount, and that is what Tesco expect you to do.

You can repay the full loan early, and you may save a small amount of interest, depends on the terms of your loan.

redux

Take a look at the terms for paying back early. It's quite common to say something like two months interest on the amount. Advice on here is sometimes it's possible to sidestep this a bit by paying back most but not all the balance, leaving just a month as normal. So for instance you might pay £2000 now

And Tesco's website does seem to say something along these lines

Is there a charge for settling my loan?

Yes, there’s a fee of up to two months interest. But the full amount you pay back may also include an interest saving.

There's no charge if you decide to reduce your term through overpayment.

redux

To add to the above, note that although that page has a link for request a settlement figure, if you just send some overpayment and leave a balance to clear in the last month you probably don't need to contact them