Loan overpayment help

sardonicraccoon

saajan_12 said:

sardonicraccoon said:

I have asked for the £400 to be returned on this basis but I’m not sure this will be honoured so now feel I’ve thrown a chunk of money down the drain. They have given me an early settlement figure today of £1312.58. 

If it helps, the loan started on 07/01/25, and to date I have made 1 payment of £202 and what I thought was an overpayment of £400. 

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Even if they're phrasing it in the same way, might they be essentially offering you the same as overpayments? 

If you overpaid the balance and terminated today, you've essentially had the loan for 1.5 months (7 Jan -> 20 Feb) which would have incurred 111% x £1500 x 1.5/12 = £208 simple interest. Plus the £1500 makes it £1710. 

You've paid £202 + £400 and would pay the early settlement figure of £1312.58 = £1714. 

I know you can't necessarily pay it right now, but it sounds like their maths does work out to be the same as if it was treated as overpayments. So if you reached out again when you could pay off in full, the revised settlement figure might be in line with your expectations as if you overpaid. 

Yes it’s the phrasing that caused me the alarm I think, but everyone’s explanations here have hugely helped!

If I was a more cynical man I might be led to believe that their explanations are purposely confusing or at worse misleading, causing people to fall into a high credit trap - but as I’ve said before this might just be my inexperience/naivety.