HSBC Bank Loan advice on paying it off early
Discussion
Hi all,
I'm looking to buy an E46 M3 and will be getting a bank loan to cover a large chunk of the purchase price.
My question is, I'll likely be able to pay back the loan in a 12-18 months, but instead of committing to that term what I'd like to do is get a 3 year term and hopefully be able to add to the monthly payments as and when.
I've never borrowed money from the bank before, so is that possible? They'll be losing out on interest so is there going to be any hidden charges?
I've had a quick look on their site but getting a direct answer is proving difficult.
http://www.hsbc.co.uk/1/2/loans/personal-loan#/app...
Any advice/experience would be appreciated.
Kind regards
Dan
I'm looking to buy an E46 M3 and will be getting a bank loan to cover a large chunk of the purchase price.
My question is, I'll likely be able to pay back the loan in a 12-18 months, but instead of committing to that term what I'd like to do is get a 3 year term and hopefully be able to add to the monthly payments as and when.
I've never borrowed money from the bank before, so is that possible? They'll be losing out on interest so is there going to be any hidden charges?
I've had a quick look on their site but getting a direct answer is proving difficult.
http://www.hsbc.co.uk/1/2/loans/personal-loan#/app...
Any advice/experience would be appreciated.
Kind regards
Dan
You are well within your right to re-pay the loan at any time and, as per the consumer credit act, the loan facilitator must reduce the amount of interest owed at the point or repayment by a given ratio... cant recall all the details off the top of my head but it should be made clear in the terms given prior to signing anything.
However, a couple of years ago it was quite common for banks to put in place charges for early repayment - on a Natwest loan I had it was a month or two's interest. So the trick was to pay off almost all of it but leave £100 outstanding, give it a month and then pay the £100 plus the then reduced insterest of 1-2 months interest on the £100 rather than say £5k.
Either way, don't be afraid to ask the bank direct these questions as its their obligation to tell you up front and a perfectly reasonable query - who knows you may win the lottery tomorrow! And whilst banks may not like not getting all the interest due, they would rather get the loan amount back than not at all via defaults etc....
However, a couple of years ago it was quite common for banks to put in place charges for early repayment - on a Natwest loan I had it was a month or two's interest. So the trick was to pay off almost all of it but leave £100 outstanding, give it a month and then pay the £100 plus the then reduced insterest of 1-2 months interest on the £100 rather than say £5k.
Either way, don't be afraid to ask the bank direct these questions as its their obligation to tell you up front and a perfectly reasonable query - who knows you may win the lottery tomorrow! And whilst banks may not like not getting all the interest due, they would rather get the loan amount back than not at all via defaults etc....
I did similar for my last car (loan with intention of early settlement) and ended up using zopa: http://www.zopa.com/loans/home-v8
You can make extra payments without any fees or settle in full. Their rates were a fair bit lower than the usual banks etc at the time - plus no extra payment fees. I ended up paying off extra chunks of money as it became available to me and overall loan was settled within 18months.
You can make extra payments without any fees or settle in full. Their rates were a fair bit lower than the usual banks etc at the time - plus no extra payment fees. I ended up paying off extra chunks of money as it became available to me and overall loan was settled within 18months.
Edited by Phateuk on Monday 7th July 08:12
Unless HSBC have changed their rules you can just pay it off in full whenever you're ready, or at least that's what I've done on two separate occasions.
They apply all the interest on day 1 to your account so you end up seeing a refund of interest which is a little strange but hey, that's how they seem to like to do it.
They apply all the interest on day 1 to your account so you end up seeing a refund of interest which is a little strange but hey, that's how they seem to like to do it.
HootersGsy said:
Unless HSBC have changed their rules you can just pay it off in full whenever you're ready, or at least that's what I've done on two separate occasions.
They apply all the interest on day 1 to your account so you end up seeing a refund of interest which is a little strange but hey, that's how they seem to like to do it.
Exactly this, I paid off a £5500 loan in one chunk and they handed me a few hundred back.They apply all the interest on day 1 to your account so you end up seeing a refund of interest which is a little strange but hey, that's how they seem to like to do it.
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