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  • FIRST POST
    • gord115
    • By gord115 13th Jan 18, 2:14 PM
    • 846Posts
    • 224Thanks
    gord115
    How much will i save paying off loan? Help needed.
    • #1
    • 13th Jan 18, 2:14 PM
    How much will i save paying off loan? Help needed. 13th Jan 18 at 2:14 PM
    I have a TSB loan at 2.9% apr for £11000 and have made 7 payments of £318.97
    I have 29 payments to make(£318.97 x 29=£9250.13)

    I have a settlement figure of £8979.43 thus saving me £270.70

    I now have the money to pay this off.

    The money is in my Santander 123 account earning 1.5% interest.

    I know it will save my money paying it off(especially as I will leave the £318.97 I have gained every month untouched) but by how much?

    Help much appreciated.
Page 1
    • Tom99
    • By Tom99 13th Jan 18, 3:23 PM
    • 1,046 Posts
    • 630 Thanks
    Tom99
    • #2
    • 13th Jan 18, 3:23 PM
    • #2
    • 13th Jan 18, 3:23 PM
    2.9% less 1.5% = 1.4% diff

    You are paying off £8,979 2.42 years early.

    If you assume the balance over those 2.42 years would be half the current balance then the amount you are saving is:

    (£8,979/2)*1.4%*2.42yrs = £152

    Alternatively you could say the saving of £270.70 represents interest at 2.9% which you are replacing with funds costing you 1.5% so:

    £270.70/2.9*1.4= £131
    • gord115
    • By gord115 14th Jan 18, 1:30 PM
    • 846 Posts
    • 224 Thanks
    gord115
    • #3
    • 14th Jan 18, 1:30 PM
    • #3
    • 14th Jan 18, 1:30 PM
    Thanks Tom, that's around the figure I came up with but wasn't sure.

    Much appreciated.
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