Promise Finance - What cost if you pay loan off early?

Hi, looking for anyone who has had experience with debt consolidation/finance companies such as Promise, Freedom, Norton etc. If you want to pay the debt off early what costs do you face? I know there is an early repayment fee which is nothing to be concerned about, but the company I am talking to keep mentioning a 'redemption' and dont really elaborate on the meaning - what is the redemption and how much does this usually amount to? I intend to pay the loan off in about 3 years and dont want to be lumbered with a huge fee. Do you have to pay off only the remaining amount you owe, or the remaining amount you owe PLUS all the interest that was due for the whole term?
If anyone can help I would really appreciate it!

Generally it will depend on the amount that you are borrowing. In the Uk the Consumer Credit Act protects you with all loans up to 拢25000, where there is now an accural method of settlement - 30 days interest penalty, which is what you mean on the existing loans that you would consolidate.

The companies that specialise in "unregulated" ie borrowing over 拢25000 are those listed above, usually to homeowners, so firstly they can charge a setup fee and a redemption fee, plus put a charge on your property and charge more interest penalty than on a regulated agreement (over 拢25k).

With all unregulated loans, you won't know until you get them to break it down and you are perfectly within your rights to ask them for an example settlement of what you would owe assuming that you keep up all payments until that time. And in some cases they will try and charge you huge amounts of interest (much as the rule of 78 calculation did before the CCA change on lower amounts).

Watch out for variable rates, fees and any opt out clauses. Interest rates unfortunatley only seem to be going one way at present.

If you have a mortgage with a bank, it may even be more sensible to look at this as an option, but do compare the cost to you over the whole term and for the 3 year pay off. At least get a comparison from one other company to check what you are getting seems fair.

Remember, if they won't do this for you, then how likely are they to help you in the future? You are very right to be cautious and insist on them explaining the redemption fee properly. (I struggle with people selling that don't actually know their product and effectively try and gloss the consumer into it - this is MIS-Selling!!!)

A redemption is the money they owe you for paying off entire debt early as you don't need to pay interest for those months. A penalty is usually incured by paying off the loan too soon because they are in the business of making money to lend money and they need to make a certain amount off your loan for it to be worthwhile to them. Usually you only incurr a prepay penalty in the first 1 to 3 years, even if it's a 10 -20 year loan. In that case it would probably be wise to pay the loan off at the end of the prepayment penalty. You don't want it to cost you more to pay early than it would to pay a few months later.

well some companies may take prepayment charges. normally housing loan companies always charge this. but some may not. you will need to check with the company. plus there are many methods of calculating the amount payable on prepayment. comapnies dont give up on the entire interest that they were supposed to earn future over a deal. there are some methods to caluclate this amount.. like ..
rule of 78
extended rule of 78

if you were supposed to pay 100rs as interst till matury they make ask you to pay somewhere around 10-20 out of it. figures given are vague