Tip to reduce the cost of your personal loans
If you can’t repay an unsecured personal loan in full you should be allowed to make extra payments to help pay off the loan sooner and so reduce the overall cost. With unsecured loans taken out after 1 February 2011, you can make extra payments of up to £8,000 in a 12-month period without penalty. For extra payments of over £8,000 the maximum penalty is 1% or 0.5% on the entire amount repaid.
Make sure you tell your lender first, However, unless the lender specifically allows it in the contract, you can’t simply overpay without warning. You must give them notice that you’re making an overpayment. Then you must make the overpayment within 28 days of that notice, although you can send the payment with the notice if you prefer.
It might easily have cost you hundreds of pounds and if this policy was mis-sold you are entitled to your money back.
Source : moneyadviceservice