I need some advice please. I have a loan for £2.700. I made my first payment last month which is £107 a month. My plan is to pay it off earlier than the contracted terms.
My question is: Should I pay extra off monthly or save money in my bank and then whack a large chunk off every now and then?
Thank you..
I have a loan for £2.700 – Here is my plan...
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Sandy
Check the interest rate of the loan and rate of a savings account you would use. If savings account is a higher rate then may be best to put excess in there.
Check the terms of the loan for how they calculate the interest because that will determine which is the best option for you.
No one can answer your question correctly without knowing this.
Check the terms of the loan for how they calculate the interest because that will determine which is the best option for you.
No one can answer your question correctly without knowing this.
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Amanda
Check the terms of you’re loan. However, as you pay interest on the remaining loan of you can pay extra when you can this will help. Additionally, if you’re going to save the extra to pay off early May be worth speaking to the loan company and seeing what the early settlement figure will be when you are in a position to do so xx
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Kimberley
I save (assuming you can trust yourself not to touch the savings). You can request a settlement figure for the loan anytime - the remaining interest is reduced - once the settlement amount is the same as the amount you've saved up - pay the loan off. And that way you'll pay back less than originally agreed - as the interest is reduced in the settlement figure.
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Kimberley
You need to check the loan agreement you can’t always pay extra each month and even if you pay it off early there’s usually a penalty clause, which means it costs you extra the reason behind this is if you pay it off early the lender will.
Loose out on interest on that loan so most lenders have a penalty clause so they get the interest as if you have taken the full amount of time to pay it off, I learnt the hard way
so check the agreement if there’s no clause you’re ok but if there is an early repayment clause just put the extra money in a savings account and use it towards the monthly fee or just leave it there whichever you prefer.
Loose out on interest on that loan so most lenders have a penalty clause so they get the interest as if you have taken the full amount of time to pay it off, I learnt the hard way
so check the agreement if there’s no clause you’re ok but if there is an early repayment clause just put the extra money in a savings account and use it towards the monthly fee or just leave it there whichever you prefer.-
Shell
I would personally look at the terms and conditions of the loan if you haven't already. Then make your decision from there.
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Bernardine
Leave the dd as is , then set your loan up as a bill payment & pay the extra when you want, is what I did, saves interest. Good luck
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Emma
Can you get a 0% interest credit card to pay it off in one go, then save for a year (normally the 0% interest is only for 12 months) and you can use the savings + interest payment to pay the loan.
Halifax have a £250pm regular saver at 5.5%, was the best on the market a few months back and if you're paying 107 and saving 107 you're almost at the best outcome you can get from it.
Obviously, I don't know Ts&Cs and whether you'll incur any changes or if your credit rating will allow you to get the 0% card, but worth a look.
Halifax have a £250pm regular saver at 5.5%, was the best on the market a few months back and if you're paying 107 and saving 107 you're almost at the best outcome you can get from it.
Obviously, I don't know Ts&Cs and whether you'll incur any changes or if your credit rating will allow you to get the 0% card, but worth a look.
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