Personal Loan Settlement amount

[KingMikel]

Hey guys,

I have a personal loan that I got a settlement figure for, and the settlement figure is more than the damn loan amount.

I owe R2,156.81 but the settlement figure is R2,199.20.

Why??

I know its only a few rands, just wanna know what's up.

Thanks.

 

[Mr_M]

Need more information like when you took out the loan, what was the interest rate etc etc.

 

[KingMikel]

Its 31%.
Loan was for R7000 - Admin fees made it R7800
Think I took it out in ~May 2012
R308 is the monthly installment, but they add R99 fees on every month, bringing it up to R407.

 

[Purply]

You'll probably find that the interest was calculated beforehand for the total amount of "months" the loan was taken for, so paying it off earlier wouldn't save you any monies whatsoever. The added "extra" is admin fees more than likely for closing the account.

That's my guess

 

[Rocket-Boy]

afaik personal loans cost the same whether you settle them early or just pay them off monthly.

 

[MrR]

That should be accrued interest that hasn't capitalised yet, and the difference could also possibly be a monthly fee or settlement administration fee of sorts.

What was the R99 fee for? Insurance?

 

[xrapidx]

Its more because of the interest from payment date to now.

e.g. 01 June to 05 June.

 

[KingMikel]

That should be accrued interest that hasn't capitalised yet, and the difference could also possibly be a monthly fee or settlement administration fee of sorts.

What was the R99 fee for? Insurance?

Yup

 

[DrewChan]

afaik personal loans cost the same whether you settle them early or just pay them off monthly.

Not quite, generally the big money you lose is on their "additional" charges.

Mine gets: Insurance R67 + admin R57,
Add that on over 3 years of paying the loan off R4464, which you would save but closing it.

This on a R13000 loan

 

[Jweb_@@]

They generally give you a settlement amount as at a specific future date. The interest for the few extra days is is then added to the final settlement figure. I had a fight with Wesbank over the same issue when i settled my car earlier this year. If you are in a position to settle the loan today, then you need to insist that they give you the settlement value as at today. And do your own calcs as well to verify.

 

[Bona Botse]

afaik personal loans cost the same whether you settle them early or just pay them off monthly.

I'm quite sure that that became illegal a while ago.