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  • FIRST POST
    • mukesh.patel
    • By mukesh.patel 22nd Sep 16, 1:36 PM
    • 3Posts
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    mukesh.patel
    How Prepayments works?
    • #1
    • 22nd Sep 16, 1:36 PM
    How Prepayments works? 22nd Sep 16 at 1:36 PM
    I am new to Personal Loan system in UK, I have taken Loan of 20,000 in Dec, 2015 for 2 year loan term. Till date I have Paid 10,000 (standard monthly payment) and now I want to prepayment some amount (4000) that does not settled the loan.

    If I pay 4000 this month Sep 2016 does it will affect upcomming standad monthly payment?
    Does penultimate month will shorter then it has to be Dec 2016?
Page 1
    • zx81
    • By zx81 22nd Sep 16, 1:47 PM
    • 8,661 Posts
    • 8,501 Thanks
    zx81
    • #2
    • 22nd Sep 16, 1:47 PM
    • #2
    • 22nd Sep 16, 1:47 PM

    If I pay 4000 this month Sep 2016 does it will affect upcomming standad monthly payment?
    Originally posted by mukesh.patel
    No.


    Does penultimate month will shorter then it has to be Dec 2016?
    Originally posted by mukesh.patel
    I don't know what that means.
    • Pixie5740
    • By Pixie5740 22nd Sep 16, 2:39 PM
    • 8,352 Posts
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    Pixie5740
    • #3
    • 22nd Sep 16, 2:39 PM
    • #3
    • 22nd Sep 16, 2:39 PM
    If you have paid £10k so far, some of which will be interest then no, paying another £4k will not settle a £20k loan. You'd really need to read the T&C of your loan but generally speaking making overpayments reduces the term of your loan (and the amount of interest paid) but it doesn't reduce the monthly payment amount.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • mukesh.patel
    • By mukesh.patel 23rd Sep 16, 12:23 PM
    • 3 Posts
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    mukesh.patel
    • #4
    • 23rd Sep 16, 12:23 PM
    Penultimate month
    • #4
    • 23rd Sep 16, 12:23 PM
    Second to Last month
    • mukesh.patel
    • By mukesh.patel 23rd Sep 16, 12:24 PM
    • 3 Posts
    • 0 Thanks
    mukesh.patel
    • #5
    • 23rd Sep 16, 12:24 PM
    it doesn't reduce the monthly payment amount.
    • #5
    • 23rd Sep 16, 12:24 PM
    So at the end of Loan term I will get Re-fund for extra paid prepayment?
    • zx81
    • By zx81 23rd Sep 16, 12:25 PM
    • 8,661 Posts
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    zx81
    • #6
    • 23rd Sep 16, 12:25 PM
    • #6
    • 23rd Sep 16, 12:25 PM
    Second to Last month
    Originally posted by mukesh.patel
    Thanks for that.

    Yes, I know what penultimate means. I just don't know what "Does penultimate month will shorter then it has to be Dec 2016?"

    I understand all of the individual words, just not in that order.
    • zx81
    • By zx81 23rd Sep 16, 12:33 PM
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    zx81
    • #7
    • 23rd Sep 16, 12:33 PM
    • #7
    • 23rd Sep 16, 12:33 PM
    So at the end of Loan term I will get Re-fund for extra paid prepayment?
    Originally posted by mukesh.patel
    No. You loan term will simply end sooner. There would be a small refund if your normal monthly payment is greater than the outstanding balance at that time.
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