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Early settlement of loan

chin nuts · 2016-04-25 16:22:32

I'm currently 8 months into a 3 year loan and am in the position currently to clear the loan early. In the contract it states that early settlements are discounted at 5% per annum of future instalments. Now I rang the company and asked them for a settlement figure. Let's say the loan amount remaining was 10k, they said I…

25-04-2016 5:22pm

#1

chin nuts

Registered Users, Registered Users 2 Posts: 96 ✭✭

Join Date: August 2009

Posts: 87

I'm currently 8 months into a 3 year loan and am in the position currently to clear the loan early. In the contract it states that early settlements are discounted at 5% per annum of future instalments.

Now I rang the company and asked them for a settlement figure. Let's say the loan amount remaining was 10k, they said I could settle for 9.5, but I also had to pay the direct debit at end of month which doesn't amount to 5% discount.

My question is what exactly is 5% per annum, as I have 2 years remaining on the loan should this equate to 10% ??

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