Expired

Paying off loan early advice

16
Found 14th Dec 2017
Community Updates
Ask
16 Comments
My 2c - if you have the £810 now, then absolutely pay it off. Then take your paperwork to Citizens Advice first to check the T&Cs to see if you were missold or just hoodwinked with very small writing. I suspect the later but someone seeing the paperwork would have a more informed view. If 118118 do not take it seriously then they will have a complaints procedure to escalate to the Financial Ombudsman Service - details on the 118118 money page - 118118money.com/con…us/

Edit - no mention of front loading on their website.
Edited by: "Ar460rn" 14th Dec 2017
Well done for scraping enough cash together to pay it off early. They sound like absolute scum. I would pay it off but make clear in writing that you do not accept the front loaded interest and will be taking further advice on the situation. Then off to Citizen’s Advice.

Find it heartbreaking that firms like that take advantage of people.
That's how it is I'm afraid.

The £842.72 interest divided by 24 is not the calculation for the correct interest payable each month.

You will find your 1st monthly payment will have a much larger portion of interest associated to it than your 24th monthly payment.
All depends on the Lender and how they work their terms of the Loan agreement, which you have obviously agreed to by taking out the Loan.

As a General rule the High Streets Banks charge interest on a daily basis for the outstanding Loan amount, plus any Set Up Fees, Admin charges etc, so by paying back early should be a simple case of paying the outstanding amount plus, if any, early payment and additional Admin charges or early Payment Penalties, so thats probably the cheapest method in paying a loan back early, Building Societies are similar but may charge interest on a monthly basis, so slightly more, no much more, to pay back.

People like 118, Ocean Finance etc, can and will charge what ever fits the bill, and will have a sliding charge rate dependent upon your personal circumstances, income and outgoing expenditure, Secured, Unsecured, and your Credit Score etc, but they are generally taking a higher risk in giving you a Loan compared to a Bank or Building Society and this is reflected in there interest rates.

I cant comment on 118 loan methods, as I dont know, but the fact that they have offered you a reduced repayment amount for early repayment is a bonus, as there are some High Risk Lenders that will simply say 'pay the full agreed amount, no deductions'.

You could follow through with your complaint, but the end of the day you have accepted there Loan Terms, the is also no harm in making them an 'Offer', you never know, but either way make sure that any disagreements you have with them or delayed payments in replaying the Loan is 'Settled in Full and Satisfied'
You will save yourself some money though.
You said all together you would have paid £1842.72 if you let the loan run but if you was to pay it off today you would only have paid £1577.80 but £153.56 of that is the early payment charges that you can't avoid.
But if you didn't have to pay them you will have saved £418.48 overall.
Unless I've got the wrong end of the stick altogether.
But yeah I would pay it all off if you can
I would pay it off, seek advice from Citizens Advice and then maybe the Financial Ombudsmen. Im surprised that is your settlement fee, I wonder if they have made a mistake so I would grab it while you can. Im pretty sure though that this is similar to payday loans which have rightfully had awful press and it was very unfair to you, in a situation whereby you were desperate and not fully understanding of what you signed. The onus is always on you but there are times of hardship when you don't act as you would normally would. Rip off merchants!
Wow what scum ,any loan I paid early is always a lot less than what was outstanding on the final balance if I carried on the monthly payments

Hate company’s like this
Ring the Money Advise Service or do a live chat with them. Here
Thanks for the response folks. I have read the all.

I called 118118 an hour ago and asked for a copy of the settlement figure of which they quoted " under no obligation to provide" and asked for it to be emailed. I asked if they can include the calculation used to reach that settlement but hey advised they can not provide that and would have to be investigated...goose bumps already!!

The good news they have advised me that they will be sending a response to my complaint in the next 24 hours of which I will share with you and may help others.

Zirk - You are completely correct on what your are saying but I find it extremely worrying that there is no mention or note of how early repayments are calculated any during the loan process. They didn't even send me a breakdown of my monthly payments showing interest/principal of which the CSM has agreed to send to me via excel sheet now. The loan was not advertised a payday and it is not, from my prospective I have a 2 year unsecured personal loan with high APR of which I have paid 2 years of interest more or less within the first 12 months and now only paying the balance...personally I cant believe this is legal in this day and age. They tell me I pay interest on the duration of the loan but that seems not to be the case and information or when I press them for it they unable to answer.

As soon as the email comes through I will be taking the advice of other folks and I will pay it off tomorrow. I will contact the CAB and ask them for assistance in this.

Ar460rn mentioned that it may be that I have hoodwinked with small writing and lack of understanding myself - of which I think is the case here.

Thankss for the advice folks.
With all due respect for the fine people on here. This is probably the wrong forum .... Try: Consumer Action Group. These people assisted me in tackling a few issues in the past.

Good Luck & Remember, if you want, you can still clear an account and keep an active complaint going.
ashmac14 m ago

Wow what scum ,any loan I paid early is always a lot less than what was …Wow what scum ,any loan I paid early is always a lot less than what was outstanding on the final balance if I carried on the monthly payments Hate company’s like this


yeah I thought this too as I had a loan many years of go of which I paid of early and saved alot of intrest on. I think I was taken in by 118118 tv ad's of many years leading me to believe they are a good lender.
realisticly speaking to lend someone who is not know to be trustworthy (good credit) 1,000£ over a 2 year period 842£ profit for them is not crazy money, many over industry like bitcoin can double there money in 1 day :P

You did not need to take there offer, we need to stop being naive we know these companys are shady, so don't take a loan then get annoyed cause you have to go to loads of effort to citzen advice to sort it out, just do not use them, there is always an alternatvie
Creatives38 m ago

realisticly speaking to lend someone who is not know to be trustworthy …realisticly speaking to lend someone who is not know to be trustworthy (good credit) 1,000£ over a 2 year period 842£ profit for them is not crazy money, many over industry like bitcoin can double there money in 1 day :PYou did not need to take there offer, we need to stop being naive we know these companys are shady, so don't take a loan then get annoyed cause you have to go to loads of effort to citzen advice to sort it out, just do not use them, there is always an alternatvie


Who are you? Mystic Meg?

How do you know the OP didn’t have to take the offer? Money worries contribute a huge factor to suicides .... Either offer advice or fall under a train. Either option is better for humanity!
Creatives5 h, 39 m ago

realisticly speaking to lend someone who is not know to be trustworthy …realisticly speaking to lend someone who is not know to be trustworthy (good credit) 1,000£ over a 2 year period 842£ profit for them is not crazy money, many over industry like bitcoin can double there money in 1 day :PYou did not need to take there offer, we need to stop being naive we know these companys are shady, so don't take a loan then get annoyed cause you have to go to loads of effort to citzen advice to sort it out, just do not use them, there is always an alternatvie


What?

Sorry I paused drafting my response to 118118 just to check in on here.

I have no issue paying £1842 over two years. my issue is 10 months into It and having to pay £1600 when you want to pay it off early. Just because our weak government allows it happen does not mean it morally justified and hence why I can see why people need the CA.

If you check the website, you can clearly see they advertise to what you call the "untrustworthy" but don't tell you the above until u call to settle. I suggest you read the part "Who do we lend to" section says it all really :118118money.com/how-our-loans-work/

You may know these shaddy companies but I don't. I can accept high APR due to poor credit and plan in the future, but to shafted when do the good thing and try and pay it off is unacceptable to me. Don't know about you but I benefited from many hour of movies on Film 4 thanks to 118118. I had to no reason to believe that it would turn out like this.

Thanks for your valued feedback anyway. Ps at the time I needed the loan, the chimney was about to collapse and required to be removed. With xmas just past and car tax/mot in dec I did not have the money and needed to make it safe asap. I tought this was a better option than payday loan over 6 months or eurocashgenerator loans.and since I had been rebuilding my credit rating I was scared that multiple application or searches would do more harm than good.
Edited by: "WDTV123" 14th Dec 2017
TheAppleGeezer5 h, 10 m ago

With all due respect for the fine people on here. This is probably the …With all due respect for the fine people on here. This is probably the wrong forum .... Try: Consumer Action Group. These people assisted me in tackling a few issues in the past.Good Luck & Remember, if you want, you can still clear an account and keep an active complaint going.


Thanks I will try them but they have sent me a rubbish response of which I am reply. Will update soon
Dont need to go down any route. Just pay them the 810. By my calculations using an amortisation calculator your interest is actually 67.24% based on your amount loaned and monthly payment. (Unless theres a few months grace before you start paying back in which it will be different)
The amortisation shows after month 10 you are still balanced at £731 as any loan is interest bearing from the off meaning they are after £80 more interest as an early repayment penalty.
The example below is base on the loan being taken out Jan 2018. As you see the daily interest bearing is high at start as your balance stays high. But as you get closer to the end your paying off more of your actual loan.

Just pay and walk away.
Hope this helps.

Month Total Paid Balance
Feb 2018 £76.78 £979.25
Mar 2018 £76.78 £957.34
Apr 2018 £76.78 £934.20
May 2018 £76.78 £909.77
Jun 2018 £76.78 £883.97
Jul 2018 £76.78 £856.72
Aug 2018 £76.78 £827.94
Sep 2018 £76.78 £797.55
Oct 2018 £76.78 £765.46
Nov 2018 £76.78 £731.57 ### month 10
Dec 2018 £76.78 £695.78
Jan 2019 £76.78 £657.99
Feb 2019 £76.78 £618.08
Mar 2019 £76.78 £575.93
Apr 2019 £76.78 £531.42
May 2019 £76.78 £484.42
Jun 2019 £76.78 £434.78
Jul 2019 £76.78 £382.36
Aug 2019 £76.78 £327.00
Sep 2019 £76.78 £268.54
Oct 2019 £76.78 £206.81
Nov 2019 £76.78 £141.62
Dec 2019 £76.78 £72.78
Jan 2020 £76.86 £0.00
Totals£1,842.80
Post a comment
Avatar
@
    Text

    Top Discussions

    Top Discussions

    Top Merchants