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Jo C.
Jo C., Barrister
Category: Finance
Satisfied Customers: 71041
Experience:  Over 5 years in practice
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. May I ask a question relating to the settlement figure

Customer Question

Hello. May I ask a question relating to the settlement figure I received today on a secured loan ? I am worried the early settlement rebate interest deducted is incorrect .-JJ
Submitted: 3 years ago.
Category: Finance
Expert:  Jo C. replied 3 years ago.
-Could you explain your situation a little more?
Customer: replied 3 years ago.

Hi. I had taken a loan of £7500 against my home in march 2013.

Loan period is 48 months . Monthly instalments is £288.53 for 47 months & £288.29 last month.

The agreement shows

Rate of interest as 26.82%

APR 40.06%(variable )

Interest £4999.20

set up fee £600

acceptance fee £750

total payable £13849.20

I have asked to settle this month & I am given

outstanding balance £6924.48

early settlement rebate of interest £1320.16(based on Consumer credit early settlements regulation 2004 ) it says

amount payable in settlement £5604.32

Is the amount payable and early settlement deducted right?

Expert:  Jo C. replied 3 years ago.
Is there any reason you think it may not be?
Customer: replied 3 years ago.

I don't know the consumer credit act 1974 (pursuant to section 97)

The rebate interest they have said is calculated on consumer credit act 2004 (early settlements ) is less than what I would have expected

I have used online early repayment calculators that give a different amount .

I want to the know what the accurate legal settlement figure I should expect to pay is ?

I am not convinced that their figure they have explained based on an Act is right?

Expert:  Jo C. replied 3 years ago.
Early settlement figures are a sum that the company accept to wipe off the debt.
They are fully entitled to demand the full amount. They will accept less because there is an advantage in having money up front.
The settlement figure is the price they have quoted. If they have quoted less than the correct sum then that is their problem as long as you agree and pay before they realise and withdraw it.
Can I clarify anything for you?