Loan closed bar £5 final payment query

GolfR · 19 January 2020 at 9:20AM

Hi, I have a loan with lloyds of which I paid off the balance of £9700 in full a week ago bar a final £5, the settlement figure was approx £9888 so an extra £188 in interest. After looking at previous posts during a search on mse forums I decided to pay it all apart from the £5 which I expected to be taken out plus 56 days interest when my loan is due on the 24th. I had a letter yesterday from lloyds which stated I have £5 left owing but that it is too late to cancel my loan monthly payment of £250 (the letter was dated the 11th Jan so how this is too late is beyond me) and that I would receive any applicable refund in due course. Will they keep the final leftover settlement figure given to me of £188 and refund what is left from that or will it be the £5 plus 56 days interest amount, plus any additional interest from when the balance was full? Thanks

[Deleted User] · 19 January 2020 at 11:01AM

It will be as outlined in the terms re early repayments.

What does it say regarding over payments compared to early settlement.

The reason the it was too late to change the DD is that they wouldn't have been able to communicate the new amount in time to you and would therefore have been in breach.

jonesMUFCforever · 19 January 2020 at 3:57PM

Whatever you owe the final payment will cover it.
If the final payment takes the loan balance into 'credit' then they will refund you.

Ben8282 · 19 January 2020 at 8:21PM

Unless Lloyds have changed things recently, I thought the purpose of making the overpayment was to avoid the 56 days interest early settlement charge as there are no fees on overpayments?
If they say you will receive any applicable refund in due course then I have no reason to doubt that you will.

GolfR · 19 January 2020 at 10:20PM

Thanks for your replies.

zx81 - it doesn’t really say on the t&c’s about paying it all minus a small amount (apart from ‘change the amount of your final payment’) which is why I’ve asked here. I guess they don’t want you to know this is an option or they’ll lose out on money. This is what they say:

8) Can you make extra loan payments?

You can make extra payments to your loan at any time. Any extra payments made on a non-working day, will be used to pay off what you owe us on the next working day. Extra payments:
• will not change or replace your fixed monthly repayments and you will still need to pay these on time every month;
• may change the number of repayments you have left and the amount of your final repayment;
• will be used to pay off any fees or charges that we have charged you before reducing the other amounts you owe us; and
• can be made through Internet Banking (if you are registered and have a bank account with us), at a branch or by debit card if you call the number in the contact details box below.

9) Can you repay your loan early?

You can pay off your loan in full at any time by giving us notice. You can do this through Internet Banking (if you are registered and have a bank account with us), at a branch or you can call us or write to us. Our telephone number and address are in the contact details box below.
• You must pay the full amount you owe us, plus the interest you agreed to pay us for the remaining term of the loan. This means you must pay us the total amount of your remaining repayments under the agreement, less a rebate that we will apply.
• This rebate is calculated in accordance with the Consumer Credit (Early Settlement) Regulations 2004.
• Because of the rebate we will only charge you up to 58 days’ worth of interest on the outstanding balance because we will calculate the settlement amount using a settlement date that is 58 days after the date of the settlement notice.
• We will tell you how much you will need to pay to settle your loan early. We will provide you with an early settlement quote that will be valid for 30 days.

Ben - precisely which is why I paid it all minus £5. I’m not doubting that I’ll have back what is due to me but I’m just trying to figure out whether they’ll keep the rest of the settlement figure or just a small amount. Oh well I’ll have to wait and see.

Xbigman · 20 January 2020 at 12:18AM

If anyone else is thinking of doing this then the best way is to make a lump sum overpayment leaving a balance equivalent to one months payment PLUS a few pounds. If done this way the loan completes naturally and you don't pay any extra interest on anything, just a couple of pounds (if that) for the months interest on the last payment and part payment.

In the OPs case they paid off all but £5. Lloyds computer took another full months payment putting the account into credit. What happens now is that in a few weeks Lloyd's computer will try to put through another DD at which point it sees the account is in credit, so closes the account and issues a refund. Its just a case of waiting for Lloyds systems (which only update a loans status at the point of taking the next payment) to catch up.

Darren

Westie983 · 20 January 2020 at 4:03PM

OP -

You will get a refund of the credit - I did the same as you, although I left just short of my loan payment to be collected by the last DD, and then the "credit" which was about £4 was refunded back to my bank account and no other interest was applied.

You could wait for the DD to go out wait a few days and call them up to refund, keep the DD on your account for them to send it back, then cancel, or you could wait for the following month DD to be called for and the computer working out the payment is less then the DD amount you have paid in previous months.

Westie983

GolfR · 20 January 2020 at 10:10PM

Thank you Westie, this is what I was hoping to hear!! I’ll give them a week or so to refund me and if it’s not back by then I’ll give them a ring. Thanks again

Loan closed bar £5 final payment query

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