Finance/Interest

[mg3091]

Hi guys... & girls...

Firstly I don't post on here a lot, so I apologise if this is a repost.. but need a bit of advice..

Have a car on finance, have paid 7 payments of £270 so far, this is a 4 year agreement, plus the final payment of £3,462..

Basically what I would like to know is am I likely to get penalised by the finance company for paying it off earlier? I've decided I'm keeping the car rather than PX'ing it...

Me and the missus are basically looking at consolidating all our debts, but this is the major one, all the others aren't that bad.. But we pay around £430 a month on loans (including this one) looking at getting a consolidation loan to save us money per month (bit of savings potentially )

 

[edscdk]

ring them and ask them depends on the fine print

 

[mg3091]

ring them and ask them depends on the fine print

They are closed now, going tomorrow after work but thought I would ask if anyone has had any personal experiences with doing this...

 

[spookywillow]

I save money on my agreement if I settle early but the amount I save gets smaller the longer I leave it.

 

[ins0mn1ac]

If you're thinking of a loan to pay it all off some companies have settlement fees/offers at certain dates, I know when I had a finance the company I used gave me a certain price at 36/24/12 month marks at a slight discount, probably worth phoning them up when you can to ask really.

 

[[TW]Fox]

You will not be penalised for paying it early - this is no longer allowed under revisions to the Consumer Credit Act in 2011. They can only make a very small charge now, and you'll save the interest you won't need to pay. You can overpay or clear in full.

 

[rodenal]

As above, I paid £2k off a £5k balance last year, they just gave the option of either reducing the term or reducing the per month payment with the rebate.

Just call and ask for a settlement figure - if your loan still has some years to go then it should be less than the outstanding balance (interest rebate, the more ridiculous your rate the better rebate you'll get), If it's got say a year or less to run you won't notice much difference

 

[mg3091]

I've only had it for 7 months so far and it's a 4 year agreement, so theoretically I could pay the whole lot off and be done with it...

 

[~Divine~Wind~]

Ah would probably be a huge saving on the interest you would've otherwise paid then

 

[mg3091]

Well after a few phone calls, turns out we will borrow a lot less than expected due to missing out the interest, new home here we come!