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What happens if I want to close my loan early?

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TitleWhat happens if I want to close my loan early?
Answer

If you’re thinking about closing your loan early, it’s important that you get an early settlement quote first. You can get a quote by: 

  • Logging into your account
  • Click Manage
  • Scroll down to the Close your loan section
  • Click Calculate my settlement

We’ll charge an early settlement fee if you choose to close your loan early. How we calculate this is is determined by the Consumer Credit (Early Settlement) Regulations 2004 and is summarised below:

  • If your original loan term is 12 months or less, we’ll charge up to 28 days interest and include this in your settlement quote
  • If your original loan term is over 12 months, we’ll charge up to 58 days interest and include this in your settlement quote.

This means that, depending on your original loan term, we’ll give you a settlement quote which is your latest outstanding balance, any daily interest due to be applied, plus the equivalent of one or two month’s interest as an early settlement fee. Your quote will be valid for 30 days. 

If you get a quote to settle your loan, and your next repayment is due within the next three working days, we won’t be able to cancel your Direct Debit in time. So, if you were to settle your loan you’d effectively overpay your account. Don’t worry - we’ll refund any overpayments within 10 days. If you’d prefer this not to happen, we recommend waiting until 10 days after your next repayment due date to allow for this payment to clear before requesting your early settlement quote. 

Closing your loan early will reduce the amount of interest you pay overall.

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