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Settlement figure

nzxt
nzxt Posts: 12 Forumite
in Loans
Hi, I took a loan out for £4946.40 @ 4.1% interest / 7.9% APR over 48 months. tTe current outstanding balance is £2050.54. What is the calculation to figure out the interest savings if a final settlement was asked for?

Comments

  • Nebulous2
    Nebulous2 Posts: 5,749 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Multiply the monthly payment by the number of payments left. Then deduct the settlement figure. Whatever is left is the saving.

    Settlement figures vary. Lenders are allowed to charge a settlement fee of two months interest but some of them don't. Your terms and conditions will tell you if yours does.
  • C.M.
    C.M. Posts: 79 Forumite
    From my experience with tesco they do charge interest for repaying early. However, if you were to make a larger over payment (and ask for it to reduce the term of the loan) and then wait a few days for it to appear on your account, then the additional interest will only be charged on the remaining amount - saving you a bit extra again
  • Money_Rollercoaster
    Money_Rollercoaster Posts: 247 Forumite
    It's easier just to ring Tesco for the settlement figure ... :)


    A couple of things to note:


    1. they'll likely charge you 58 days interest as part of your settlement
    2. the settlement figures can be a bit odd, because they might not include your most recent payment (due to the time they allocate for clearing)
    174 BPM >> CC Balance (0%) -£3,565.99 - Target DFD Dec 2017 >> Loan (Car) (3.1%) -£19,803.74 - Target DFD Nov 2020
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