Settlement information
What is a settlement figure?
A settlement figure is the total amount you need to pay, if you want to pay off your loan early.
Important information about your settlement figure:
- Valid for 28 days from the date you request it.
- Not a commitment – asking for a quote doesn’t mean you must pay it.
- Any monthly repayments that are due during the 28-day period will still need to be paid. This is because the settlement calculation has assumed that they will be paid.
- You can request a new settlement figure if your balance changes after making a payment. Your updated figure may be lower, so you’ll know the most accurate amount needed to clear your loan.
You can use your online Plata account to:
- Pay your loan off in full or,
- Make a partial settlement.
How is a settlement figure calculated?
We completely understand that settlement figures can feel confusing. This is because they include both:
- An interest rebate you may be entitled to, and
- Plata uses early-repayment interest, as permitted under the Consumer Credit Regulations 2004 (the "Regulations") for this type of loan.
Your settlement figure is based on the structure of your loan (which is that the interest is front-loaded) minus any interest rebate you may receive, plus the permitted early repayment interest. Any repayments that are due during the 28-days that your settlement figure is valid for, must still be paid.
The early‑settlement calculation is defined in Schedule 2 of the Regulations.
The calculation is set out in the Regulations – it was not created by Plata.
Most customers are surprised at how technical it is, which is why settlement figures can seem hard to calculate.
Here is the link if you would like to see the official calculation.
Your settlement figure is the amount needed to pay off your loan in full. It will include:
- The remaining balance of the amount you borrowed.
- Additional interest, which is allowed under the Regulations.
Your settlement figure may also include:
- An interest rebate (interest saving) if you're repaying your loan early.
Interest rebate
If you repay your loan early, you may not have to pay all of the interest that would have been charged over the full loan term. This reduction is called an interest rebate or interest saving.
Additional interest
When settling your loan early, the Regulations allow lenders to include a limited amount of additional interest:
- Up to 28 days' interest if your original loan term was 12 months.
- Up to 58 days' interest if your original loan term was longer than 12 months.
This is not a fee or penalty for early repayment. It is sometimes called early-repayment interest and is permitted under the Regulations.
Your final settlement figure will include any interest rebate you are entitled to, plus, the permitted early repayment interest for your loan.
How are monthly repayments worked out?
Each monthly repayment is made up of two parts:
- The amount you borrowed – paying back the loan itself
- Interest – the cost of borrowing
Your monthly repayment amount stays the same every month for the length of your loan.
Interest is worked out on what you still owe at that time. Because of this:
- In the earlier months, more of each payment goes towards interest
- As the loan balance goes down, more of each payment goes towards paying back what you borrowed
This is how most fixed‑rate loans work and is not a fee, penalty or extra charge. You only pay the interest shown in your loan agreement, and no more than that.
Good to know
- You’ll never pay more than the total amount payable shown in your loan agreement.
- If you repay early, you may still be eligible for an interest rebate.
Thinking about repaying early?
Early repayment can save you interest overall.
Plata loans have a minimum term of 12 months, so customers seeking short‑term borrowing may find other products more suitable.