Have i worked this out right?

James240

I wonder if some one can confirm my sums for me.........

My loan as it stands with Egg is £10300 at the moment and im paying off £305 a month i have worked out that my loan will end in in Jan 2009

Been on https://www.whatsthecost.com and it works out that out of the £305 a month that im paying, approx £239 comes off what i owe. (obviously this will increase with every payment i make be it by a couple of pounds every month)

Now if i put in additional payments every month of £170 that means i will be paying £409 a month off my loan (have checked with Egg and they have said any overpayments i make comes off the amount i owe, so the more over payments i make the less interest ill have to pay)


does this mean i can effectively finish my loan in approx 22 months? or is this me just being very bad at sums?

Any guidance on this would be most appreciated


Many thanks


James

James240

bump........

Willsnarf1983

bad with sums mate

because if ur over paying then the interest that gets accumilated will be alot less each month than not over paying.

use the snowballing method to find out a more accurate time


Will

johannamse

Try this...technically for mortgages, but will work...

http://www.channel4.com/4money/mortgages/features/overpayment_calculator.html

James240

Willsnarf1983 wrote:

bad with sums mate

because if ur over paying then the interest that gets accumilated will be alot less each month than not over paying.

use the snowballing method to find out a more accurate time


Will

so u reckon it could be a lot less in time scale then will?

Willsnarf1983

yeah

say u owe 100 quid and interest is 5% and u pay £10 at the mo


owe 100 pay £10 gain £5=£95 debt left
owe 95 pay £10 gain £4.75= £89.75 left but if u over pay by £20
you get

owe 100 pay 20 gain £4= £84
owe 84 pay 20 gain £3.7= £67.70


and so on, what i am trying to say is that the interest ur paying is much less if ur overpaying so ur monthly payments theoretically should be less.


someone help me please with the snowballing link


thanks

Will

James240

oh right yeah i get what ur saying Will, wheres Ms_London when ya need her! LMAO!! if anyone can help with the snowballing link would be most grateful.

James

Robert_Sterling_3

I make it that £10,300 divided by £409 is 25 approx
So it certainly would take less than 25 months.
I would need to know what the interest rate is to be able to offer a more accurate answer.

But 22 months or less seems to be highly likely.

Good luck

Elaine_Wilson

OK, here are my calculations.

If paying £305 per month clears the loan in January 2009 then the interest rate is about 8.69%. Does that sound about right?

Changing the repayment to £475 will clear the loan during October 2007.

Regards

James240

sorry guys interest rate i belive is 7.9%

johannamse

I agree, you will pay off in Oct 2007. You will save yourself £512.10 (approx), so well worth doing. Maybe toward the end of the loan, you could also move it to 0% credit card, saving even more.