Paying off Lloyds TSB loan early - advice please!

jonesMUFCforever

barrowfordred wrote: »

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.

Yes there is you pay less interest!

zeropoint

Hello

I have just tried this route (paying off all the loan but leaving enough for the last month's DD to be collected, which they did) but Halifax still want to charge me the 58 days interest on the amount of the loan outstanding before I made the large over payment.

mrmajika

zeropoint wrote: »

Hello

I have just tried this route (paying off all the loan but leaving enough for the last month's DD to be collected, which they did) but Halifax still want to charge me the 58 days interest on the amount of the loan outstanding before I made the large over payment.

I'm sure someone will be along soon to clarify Halifax's position on these things, but this thread is in relation to LTSB and not Halifax. Despite being the same banking group, they operate differently, so you may well find that the overpayment method won't work with Halifax.

zeropoint

Thanks for the reply mrmajika....

jonesMUFCforever

zeropoint wrote: »

Hello

I have just tried this route (paying off all the loan but leaving enough for the last month's DD to be collected, which they did) but Halifax still want to charge me the 58 days interest on the amount of the loan outstanding before I made the large over payment.

Did you tell them that you wanted to close the loan or just pay off a lump sum?
If you said pay off a lump sum they were in the wrong IMO.

zeropoint

I called originally to pay off the loan last month but when they mentioned the 58 days interest I googled and came here and made the overpayment instead. Then I received a letter from them thanking me for the overpayment but the figure in the letter was dramatically (and I mean by several thousand) less than I had made. I then checked the balance of my account online and saw that the full amount of my overpayment had been applied. That's when I called them to query the letter. The woman I spoke to said there was an error with the letter and then tried to force a settlement figure on me. I said that I had not settled in full but rather I had made an overpayment and that they had taken the final amount by direct debit and that therefore my understanding was that the 58 day interest penalty was not due. She just kept repeating that as I had settled early the payment was due and continued asking me if I wanted to make the settlement payment there and then over the phone. At that point I decided to come back here for advice.....Thanks.

jonesMUFCforever

Ok they are in the wrong - the 58 day interest charge should now only apply to the outstanding amount after your overpayment.
Don't do anything else let the d/d go through (don't cancel it) they will close the loan automatically when it is in credit and refund you the difference.

zeropoint

Thanks so much for your help. Just one more query to confirm I'm understanding correctly. When Halifax took the last direct debit that pushed my account into credit by a small amount - which I had calculated approximately to cover the interest due to them. My account balance has a minus symbol in front of it now. Should I still leave the direct debit in place until I hear from them that the account is closed?

tomosap

Hi,

Came across this thread in a google search. I have outstanding finance on a car that I own, and would like to sell it privately. As I do not want the hassle of trying to sell a car with finance, I have been offered a loan by Lloyds which I a considering using to pay of the finance.

So here's what I was hoping to do, and wondered if you guys could advise...

Borrow, for instance, £5000 and use it to pay off car finance. Then, sell the car, and pay off the loan early (within 30 days) without incurring any penalties/excessive interest, i.e. essentially paying back the £5000 pretty much to the dot.

Is this possible given what other people have described?

Thanks,
Tom

jonesMUFCforever

You will have 30 days interest + 58 early settlement fee to consider.