HSBC Loan - can i pay off early?

rp5017

I have £4970 o/s with HSBC ( personal loan). Could i pay £3600 off the loan without being penalized.

Also would the monthly repayments remain the same and the loan paid off quicker or would the repayments go down?

Thanks

Rick

stripeyfox

I guess that you'll have to speak to HSBC but my guess would be that you cannot part pay off the loan. Its either the agreed monthly amount or the full settlement figure I imagine.

rp5017

Was hoping i wouldn't have to speak to them.

Guess i will have to thanks for the reply.

nikkikl

When I worked there a couple of years ago (in loans) you could only pay off an actual personal loan in full, not part pay it. The personal loans are 'front loaded' meaning that you pay off the interest first, then the loan amount. Once you have paid off the interest, there are no penalties when you pay off the loan so it depends how much you have left and how far in you are. A flexiloan could be repaid in bits though.

I assume its the same now, I could be wrong!

Nikki
x

mrcow

They won't bite!

What would you like to happen? The replayments to go down or the loan period to decrease?

As you could always ask about taking out a new loan to cover the outstanding £1300 or so to create the desired effect.

What's your APR on the HSBC loan? If you can pay off the loan with no penalties, it's worth having a look around at what your other options are (for example could you get the remaining £1300 on a credit card at 0%? or are there any better loan offers out there?)

rp5017

I will phone tomorrow to see if there any penalties. I won't have enough money to pay the loan off in full unfortunately.

Thanks for all the replies

rp5017

Just to let you know i phoned the bank and there is no penalty for early settlement. Also the redemption figure was less than i thought due to the interest being put on at the beginning of the loan (nice surprise)

xela_17

rp5017 wrote:

Also the redemption figure was less than i thought due to the interest being put on at the beginning of the loan (nice surprise)

I don't understand why the redemption fee would be less if the interest is put on at the beginning. If you have, say, £3000 left to pay on a loan and you wanted to pay it all off at once, why wouldn't the redemption figure be £3000? Could someone explain?

Darth_Neo

I've paid off several loans with HSBC early, I reckon they work out how much the interest is over the period of the loan, add that to the loan amount to give you your total loan amount, which is always the amount you are actually paying back. But if you pay back early, they can't charge all of the interest over the whole loan period, as you have ended it early. Hope that makes sense! Be carefull tho if you make a habit of changing loans, as some companies charge a month or 2 or 3 interest when you pay back early.