Are There Any Charges for Early Loan Settlements?

Q: Are there any charges for early loan settlements? ~ Louise, Wigan.

Most companies hand their customers with the opportunity to make early loan settlements. Very few companies however disclose specific information surrounding any charges that may be incurred as a result of a settlement. In most cases there will be no required admin fees, but the full interest charge for that complete month may need to be paid. Some firms may even ask for an interest charge for the subsequent month. There are differences across sectors and obviously each company will have their own individual requirements. Some lenders may only charge you interest until the day that you clear your balance. Amigo Loans and Wonga are a few popular firms that price to the exact day.

The clearance process will be very straight forward with Wonga. You simply login and clear your balance there and then. This can be accomplished here since they are a very tech-advanced company and the cash value won’t be too significant. As we’re aware, Amigo Loans enables the same capability, but most guarantor lenders will need you to speak to an advisor to run through the settlement process. This is common in most cases when an agreement runs into the thousands. A similar arrangement procedure would need to be followed with a bank. They are however more likely to ask you to cover that entire month, or even the next one.

Account management facilities are generally designed so that the user can check their balance, apply for more funds, contact them securely etc. Overpayments may be possible, but early loan settlements at the click of a button wouldn’t be too common. A dozen or so lenders like Amigo, MyJar, Wonga etc would be expected to be the exception. Companies will want to keep your agreements running fully since this is how they make money. The savvy firms however know that making the transition of settlement as smooth as possible will increase the chance of you returning to use them or perhaps recommending to a friend. We’ll be investigating the topic queried today further in the near future.