I’m really surprised at how difficult this is find out. It’s also not in the loan agreement and customer service haven’t gotten back to me in over a week.
If I chose to pay back my loan, do I get a rebate of interest owned? It looks like all the interest is added to the lain upfront and looks like I’d need to pay 100% of total interest upfront?
So if I borrow £10,000 and interest over term was £2,000 and I decided to pay back loan after only 1 month, would I also need to pay that £2,000 interest on top? It certainly looks this way but most companies would give you a reduction in interest.
You’re shown interest up front, and then if you repay early, you save interest on the bit you’ve paid off.
Interest is essential charged daily, but visibility of total cost given on application.
You don’t usually get a ‘rebate of the interest’ because interest accrues over time and you can’t get a rebate of something that isn’t due yet.
Most loans do come with early repayment fees. The reason this isn’t in Monzo’s terms is because they don’t have any early repayment fees, so you can pay back any time without penalty and save yourself from accruing the interest you would have done over the full term.
Thanks everyone. Understood and clear now :-).