Decission based on EUR/GBP rate.

DiscoPaul_2

Hi guys,

recently I was a £13k(which I will pay back plus 2k of interest) loan by my parents to pay off my loan with Ulster Bank in the ROI. At the time when my parents finally gave me this money, the pound had plummeted so low that it would not pay off my loan, I would need another £2k Just to match the amount in EURO.

So my question is..

Would you keep it in a savings account in STERLING and hope the Pound recovers sometime in the next couple of years, whilst still paying a fair amount of interest on the loan in EURO. Thus, hopefully.. making a profit on the exchange rate.

Or..

Transfer into EURO and save by not having as much interest to pay?

Or.. Option three I still have a mortgage back at home, I could put that into overpayments on my Nationwide Mortgage?

Thoughts and Opinions would be appreciated.

hopefulfooluk

Depends on the interest rate of the loan. If it's 10%ish it would probably pay to pay off what you can, if it will allow you to overpay an amount less than the settlement figure. Although having said that, the pound is starting to go back up as eurozone interest has been lowered reducing the attraction of the Euro for investors, so I personally think it will get a bit better in the coming couple of months - but don't quote me on that.

Make sure you call for an up to date settlement figure too - if you've just looked at the current outstanding balance, you may find this includes interest, front loaded to cover the whole of the term. So the settlement figure may actually be less than the balance that is currently showing as outstanding. Don't forget to ask for a concrete figure!

DiscoPaul_2

hopefulfooluk wrote: »

Depends on the interest rate of the loan. If it's 10%ish it would probably pay to pay off what you can, if it will allow you to overpay an amount less than the settlement figure. Although having said that, the pound is starting to go back up as eurozone interest has been lowered reducing the attraction of the Euro for investors, so I personally think it will get a bit better in the coming couple of months - but don't quote me on that.

Make sure you call for an up to date settlement figure too - if you've just looked at the current outstanding balance, you may find this includes interest, front loaded to cover the whole of the term. So the settlement figure may actually be less than the balance that is currently showing as outstanding. Don't forget to ask for a concrete figure!

Both the EURO and POUND are weakening now which makes it harder to call, as with all the bad news coming out of the UK this week, EUR/GBP is at 0.94, which is close to the lowest point.

As for the interest on the loan, I hadn't thought of that Thanks!