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UK-Justice
UK-Justice, Barrister
Category: UK Law
Satisfied Customers: 16193
Experience:  Called to the Bar in 2007
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I have a credit agreement with santander to repay a loan over

Customer Question

I have a credit agreement with santander to repay a loan over 60 months. In the key information it says I can settle early by paying the following amounts. A quarter term 84.86 per 100.00 outstanding, half of the term 62.64 and three quarters of the term 35.13 per 100.00 pound outstanding. When I called them about this they said i couldnt do that and I had to pay the whole amount outstanding. They kept saying these figures were just examples??? Can you help
Submitted: 3 years ago.
Category: UK Law
Expert:  Brevitatiscausa replied 3 years ago.
Hello thank you for your question. In these circumstances, where a dispute has arisen in relation to a credit hire agreement, you may formally complain to the Financial Ombudsman Service who may investigate the matter and if they find the credit hire agreement terms to be unfair or unreasonable, they may award you compensation. Perhaps a letter to Santander threatening to complain to the FOS may prompt them to reconsider their position or at the very least give you a satisfactory explanation. I hope that helps. Please press ACCEPT so I am credited for my time. Best wishes, Brevi.
Customer: replied 3 years ago.
hi Brevi. I think i may have confused you. its not a hire purchase agreement and the financial ombudsman cant help with this. In the agreement it says I can pay the above amounts if i settle early. The question is why are they now saying I cant do that i.e settle early and pay the lesser amount to do that.
Expert:  Brevitatiscausa replied 3 years ago.
Hello, thank you for clarifying the position. I shall opt out and hopefully another expert will be able to assist you. Best wishes, Brevi.
Expert:  UK-Justice replied 3 years ago.
Thanks for your question. Please remember to click ACCEPT once you get my answer.

Is this a consumer credit agreement?
Customer: replied 3 years ago.
no its a fixed-sum loan agreement
Expert:  UK-Justice replied 3 years ago.
I see. How much was the loan for and when did you take it out?
Customer: replied 3 years ago.

amount of credit was 7852.70 credit charge 3660.90 £220.00 credit facility fee and £80.00 completion fee. Total £11,813.60. duration 60 months APR 18.7%

Under key informations is where it states about early settlement as already discussed. The first repayment was September 2007

Expert:  UK-Justice replied 3 years ago.
Is there anything in the terms you signed that says you can partially settle the agreement?
Customer: replied 3 years ago.

In the key information it states-

You may early settle this agreement by paying off the amount you owe un this agreement/ The following are examples of what would be payable at vartious intervals during this agreement on early settlement if the amount of credit was £100 and assuming you have complied with all the terms of this agreement

a) a quarter of the term £84.86

b) half of the term £62.65

c) Three quarters of the term £35.13

If the periods shown above do not fall on a payment date the figures shown avoe are calculated on the first payment date immediately after the periods shown above have elapsed. In calculating the amounts shown, no account has been taken of any variation which might occur under this agreement and that the amounts are accordingly only illustrative.

My Rights

The consumer credit act 1974 gives me a number of rights including

1. you can settle this agreement at any time by giving notice in writing and paying off the amount you owe under the agreement which may be reduced by a rebate.Examples as per above i presume as this is what appears in the agreement.

 

Expert:  UK-Justice replied 3 years ago.
Thanks for that - what you have said confirms my reading of the agreement.

In the terms you have stated above it does say "if the amount of credit was £100".

It is giving you an example. Under the Consumer Credit Act 1974 it is not possible to partially settle an agreement.

However under the Consumer Credit Act 2006 you can make capital repayments and make partial repayments.

As your agreement is regulated under the 1974 Act it is therefore not possible to make capital repayments that is not a full settlement.

The term you have given reinforces that as it is using £100 as an example.

I am sorry that this is not the answer you were looking for but based on what you have said and the terms, this is the legal position.
Customer: replied 3 years ago.

Thank you for your help. If I now accept the answer will they take another £18.00 out of my account because it has already been taken.

Thanks

Expert:  UK-Justice replied 3 years ago.
No. Once you click accept your account will show zero and it is only when you ask another question do you need to make a further deposit.

Please be kind enough to click accept - thanks!
UK-Justice, Barrister
Category: UK Law
Satisfied Customers: 16193
Experience: Called to the Bar in 2007
UK-Justice and other UK Law Specialists are ready to help you

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