HSBC Loan Settlement Query

[mozza42]

I took out a personal loan for a car 2.5 years ago, and there's about a year on the agreement.

I want to pay it off and so asked for a settlement figure; the figure was the same as the total amount outstanding.

I queried this as I'm not having the money for the full term so had assumed I didn't have to pay interest for the full term?

HSBC say that the loan is loaded up-front and thus it's just unfortunate that I have paid off all of the interest - now all I'll be doing is paying back what I borrowed.

Is this standard industry practice?

Cheers in advance.

[Brink]

You've been Dixon'd!

[sinizter]

I think the rules on interest pre-loading has recently changed and they are no longer allowed to do it that way.

But, I don't know where you stand if you signed up to an agreement which did that when it was allowed.

[mcflurry]

It will depend on the APR and your payments so far..

[Ungarsee]

Front loading was the norm a few years back but I've been out of this side of banking for a few years. I'd suggest checking on the FSA website or money saving expert site about when the changes kicked in on loans and for an explanation on front loading google the 'rule of 78'

[Kudos]

The sponsored ad on my page is for a "no worries" loan. Perhaps get one of them instead?