Paying off Lloyds TSB loan early - advice please!

g553

If your trying pay off the full amount then they will be bolting on two month interest to the amount.

Yes you can get around this:j
by paying less than this (e.g. full amount - month DD - £5). You will still pay some interest, but the interest on ~£20 is negligible and they will collect the rest of then money the month after then you free!!!


Congrats on getting out of that shi**y loan btw.

Rupert_Bear

g553 wrote: »

Update: I just phoned them to try and pay it off but they still wanted that silly amount for the settlement fee, they said (reluctantly) that the settlement quote lasts for 30 days.So now I can either wait until the 26th and get a new one or just wait until the 5th when the next direct debit will easily clear it. It's a shame as I wanted to get this loan behind me, but doing it this way I'm still saving nearly a months interest.

The way to do is paying x no. of pounds and leave say £100.00. THEN phone and ask for a settlement figure and would be based on the £100.00. Have done this alot of the last few years and always worked. It is no good asking for a settlement figure and then paying off the amount less say £100.00.

zooloo66

Rupert_Bear wrote: »

The way to do is paying x no. of pounds and leave say £100.00. THEN phone and ask for a settlement figure and would be based on the £100.00. Have done this alot of the last few years and always worked. It is no good asking for a settlement figure and then paying off the amount less say £100.00.

so basically if i had £1600 left i would be best to pay £1500 at my bank towards loan THEN ask for settlement figure.:)

zooloo66

jonesMUFCforever wrote: »

You can't pay a LTSB personal loan by debit card as far as I know.
Go into a branch ask for a redemption figure; pay this off minus say £100 and let the d/d go through for the last payment. Any surplus will be refunded and you by pass the ERC.

is redemption figure another term for ERC or does it mean something else?

pub_dog

Sorry about this, just to clarify.

Prior to coming to this site and finding this gem of information I asked for a settlement fee from Lloyds which duly came through the post. It details the Capital plus interest figure, the Early settlement fee of £250. and a total balance valid for 30 days which takes it to the end of December.

Does it make any difference if I phone them up straight away and pay the Capital plus interest figure less one months DD or do I have to wait until the 30 days is up on the quote?

Thanks.

dreamdreamer

You can make an overpayment at any time, regardless of if you've had a settlement quote. You'll just have to request a settlement quote at the end of December when the other one expires, with the adjusted loan amount.

This does work, I overpaid the £3800 I owed lloyds in October by £3790. Then called 3 days later for a quote - £10 of repayment + 12p interest! At no point did I encounter any problems, they were polite, and did it without question.

MrsWassire

Just wondered if any of you knew the answer to my question: I have a Lloyds loan due to finish in November. I've been paying £5/week by Standing Order to it for a while and have just upped it to a whopping £7.50!

By my reckoning this should mostly clear my last 2 payments.

Will they just take direct debits as normal until there's less than the monthly payment to collect, then take what I owe + interest for that month (settling early?). Or do I need to ring them at any point?

Thanks.

barrowfordred

What I don't understand is this -

My web statement shows my remaining loan figure at approximately the remaining number of months multiplied by my usual monthly repayment, give or take a few quid.
The settlement figure I was quoted was slightly higher.
Monthly payments = £215.66
Remaining balance = £3439,24 with 16 payments left.
This says to me that all the interest was lumped on at the beginning and paying for instance £3000 off now will only shorten the length of the loan but not save any money???
I would look at my loan agreement if only I could find it. Loan taken out in July 2009. At 5% or so.

jonesMUFCforever

barrowfordred wrote: »

What I don't understand is this -

My web statement shows my remaining loan figure at approximately the remaining number of months multiplied by my usual monthly repayment, give or take a few quid.
The settlement figure I was quoted was slightly higher.
Monthly payments = £215.66
Remaining balance = £3439,24 with 16 payments left.
This says to me that all the interest was lumped on at the beginning and paying for instance £3000 off now will only shorten the length of the loan but not save any money???
I would look at my loan agreement if only I could find it. Loan taken out in July 2009. At 5% or so.

Interest is charged daily and not front loaded.
If you settle the loan early there is a 2 month interest penalty - could this explain the discrepancy?

barrowfordred

Maybe, but what gets me is the fact that if I paid off, for instance £3000, then left the remainder to be paid by direct debit I'd still pay exactly the same as I would if I left the loan to run its course. So other than the loan finishing sooner, there's no point.