Thank you. I will look into it! x

Hi. I confess it's a long time since I gave any help on a matter concerning 'rule of 78'. I think it is rule of 78 not 79, but I'm not 100% certain. Rule of 78 is a way in which some lenders will calculate early repayment costs. It works out how much interest you should have paid at any time during the repayment period of a loan. Its main feature is that the interest is not spread evenly over the payments during the term of the loan. Under rule of 78 you pay more interest in the beginning of a loan and as each repayment is the same size, the part paying off the capital is smaller in the beginning of the loan increasing over time. It was abolished on 1.6.05 because it was so unfair. Not sure what you can do about it.

I have recently been informed that the secured loan I have has reached the end of it's fixed term and am now going to be put onto a higher rate which results in an additional £60 per month. I asked for a settlement figure with the idea that i will try to add onto my mortgage. We originally borrowed 27k and we have paid 18k so far in total over 5yrs (obviously the interest is paid 1st) but they want 31k to settle the account!! they mentioned something about a rule of 79? is this right?