Settling a loan

neil_g

neil_g

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Neil
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I'm in a fortunate position where I'll be phoning my bank later to settle my loan with them.

I know you normally get a settlement figure which doesn't include interest etc but my other half seems insistent that you can haggle further. I can't find any information online about this other than with debt collection companies.

So my question is has anyone heard of this before and haggled with any success?
 
If you pay back loans early a lot will actually charge you an early settlement fee. Some loans are set up so you pay the interest first and then the capitol, so on some loans you save very little paying them back early.

So yes you may be able to haggle especially if you dangle the possibility of another loan with them.
 
Maybe worth saying you'd like to settle the loan today but i only have ... (say £50 off their figure). See how quick they say no. If its an immediate no then you probably have no room to haggle. Or call back and speak to another agent, they may have more discretion / better mood!
 
Depends on how long the loan has been running and how much you have made them. Those having debt interest frozen are usually in a better position to haggle as banks would rather have a lump sum now than a tiny dribble for a few years and then have to write it off.

Work out what you'd pay if you kept the repayments going until term and what the actual amount is outstanding if you paid it off today. If there's a difference then that's your discount right there.
 
srichards said:
Work out what you'd pay if you kept the repayments going until term and what the actual amount is outstanding if you paid it off today. If there's a difference then that's your discount right there.
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true.

to be honest im not too fussed, id just rather not have the payments not coming out every month. just the OH was banging on about haggling :lol:
 
neil_g said:
So my question is has anyone heard of this before and haggled with any success?
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Do you think it's reasonable to abide by the terms of any contract freely entered in to?
 
onomatopoeia said:
Do you think it's reasonable to abide by the terms of any contract freely entered in to?
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Good lord man lighten up, this isn't the great train robbery it's business.


Ask if you want to ask, you may not get but certainly won't get if you don't ask.
 
It does no harm to ask. Expecting a discount and getting stroppy if there wasn't one would be a different matter.
 
Absolutely you can haggle, I would make an appointment and go into your bank to discuss this though rather than over the phone.
 
Rapscallion said:
I think its reasonable to negotiate where possible!
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So do I, when forming the contract. Once my word is given though, it is inviolate. I would expect the same of the other party to the contract as well.
 
I think the haggling comes in when you are in difficulty, arrears, have missed payments etc. and aren't too concerned about your credit rating. In that situation, haggle, otherwise just pay it off in full.
 
Good point about credit rating, just be carefull a haggled figure doesnt go against you.
 
True, but when you took out the loan the Bank was expecting a certain amount to be paid back over a certain time period, you agreed to that by signing the loan form etc, now you want to try and pay back early (which is acceptable to all concerned) but less than their settlement figure, even though they have early repayment T&Cs, which is the figure they have given you and what they are expecting. Anything less means they havent received what they were expecting, so in theory you are defaulting to some degree. All I'm saying is it may be worth checking what the ramifications will be.
 
Gone are the days when you could earn "brownie points" by the bank manager for paying loans off early. In the eyes of the banks, you and I just just two of the millions of faceless customers coming and going.
When you think about it, if everyone paid all their loans off and start saving up, this would make the banks sweat as there'll be no revenue coming in via their interest rates so they'd much rather you drag out the loan and let it run it's natural course.
The only reason why you would want to pay off the loan early is for that peace of mind (as well as saving on the interest rates) where that'll be one less financial millstone off your neck. That was the only reason why I've decided to pay off all my loans, borrowings and overdraft a few years ago and vowed never to take any more credit on again (and I've done very well on that one).
 
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MatBin said:
True, but when you took out the loan the Bank was expecting a certain amount to be paid back over a certain time period, you agreed to that by signing the loan form etc, now you want to try and pay back early (which is acceptable to all concerned) but less than their settlement figure, even though they have early repayment T&Cs, which is the figure they have given you and what they are expecting. Anything less means they havent received what they were expecting, so in theory you are defaulting to some degree. All I'm saying is it may be worth checking what the ramifications will be.
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If you settle early, with the loan in good standing ( not defaulted or in arrears) there are no negative ramifications. It's just marked as settled ( in good manner) on your credit file. You save the interest you would have paid between settlement and and of loan had it run its course. It's a commercial 'risk' the bank have to accept if you wish to view that way
 
The bank will lose money if you settle early when compared with you sticking to the original payment plan. I can't see why they would agree to losing even more!
 
neil_g said:
For reference they wouldn't haggle. I'm not fussed though as the settlement figure was lower than I expected :)
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Just tell the OH you negotiated a good deal and it's win win!:D
 
Nooooo... Tell her you ended up having to pay a huge early settlement fee so have no spare cash for any special treats for her. Then have an L of a time with any saving you actually made!!!
 
Nod said:
Nooooo... Tell her you ended up having to pay a huge early settlement fee so have no spare cash for any special treats for her. Then have an L of a time with any saving you actually made!!!
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Naughty! :lol:
 
boyfalldown said:
If you settle early, with the loan in good standing ( not defaulted or in arrears) there are no negative ramifications. It's just marked as settled ( in good manner) on your credit file. You save the interest you would have paid between settlement and and of loan had it run its course. It's a commercial 'risk' the bank have to accept if you wish to view that way
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Hugh hi, to a point I agree, I have paid off several loans early at the amount agreed at the start of the loan period in respect to saved interest etc, here the OP wished to re-negotiate the settlement figure that formed part of the original contract, in the end the Bank said "get lost", which is pretty much to be expected.
I wonder though if the Bank thought you were in financial difficulty and wanted to "deal" rather than default (because they werent listening to what you really wanted to do - as is quite possible) would they then blacklist your credit rating?

All conjecture really as they wanted their pound of flesh anyway.

Matt
 
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