Interest on Car Loan

L

loanhater

Guest
Hi all, I've just had a car loan recently taking out with AIB added to my internet account with them.

I've found on the statement that AIB have added the intrest that will accrue on the loan over the next 3 years(3 year loan) up front to my loan account.

I'm a little shocked by this, because for a previous car loan taken out approx 4 years ago and cleared within 2 years, I remember the interest being added on a quaterly basis.

The reason I'm worried is that I plan to clear the loan within 6 months as I've decided to sell my house and plan to use some of the profit money made from the house to clear the loan.

When clearing the loan, I'm assuming that I will not be liable to pay 3 years interest, when I've completed & cleared the loan well within that period. Will AIB amend to highlight this ?

Can anybody out there advise / help before I ring AIB this morning.
 
I'm nearly sure it was a variable - I don't recall being asked to pick between fixed or variable.
 
If variable rate, you should be able to clear the loan early without any penalty.
 
I recently took out a car loan with AIB & went onto the internet banking this morning to see balance & was shocked to see that I been charged the entire interest amount up-front. So I rang them & was told that if I pay off early, I'll be refunded any interest not due. The guy I spoke to gave me the settlement figure for today, which is about 1k less than the balance owed.
 
interest up front

If this is the standard practice does anyone out there know why? is is to inflate the profit figures?
 
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