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Debt question

This maybe a dumb question but what do i write down as my debt. For example i have a car finance loan of £6104 but after the term i will have ended up paying £11451 back including the interest. Do i use the 6k figure or 11k figure as my debt. Currently i am using the 11k

Thanks:A
Be your own superhero :j

Comments

  • DawnW
    DawnW Posts: 7,513 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    Actually, I think this is a very sensible question, and not silly at all. I don't know the answer, but I am sure someone will come along in a minute who does! If you were to pay the loan off early, would the interest be less, after taking into consideration any early repayment charges etc?
  • Jaggers_2
    Jaggers_2 Posts: 42 Forumite
    Normally it would be the amount to settle. Thats an awful high interst rate you're paying........
  • tilly2484
    tilly2484 Posts: 487 Forumite
    Part of the Furniture Combo Breaker
    26.2%, however i'll hopefully be paying this off early so yes would be less. I was looking at getting a lower rate loan for it but it's not really a good idea to get debt for more debt?
    Be your own superhero :j
  • RAS
    RAS Posts: 33,776 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Hi

    You need to read the terms and conditions of your existing loan very carefully, as there may be early redemption penalties that will hit you if you pay it off early.

    Check this before you do anything else.
    The person who has not made a mistake, has made nothing
  • Jaggers_2
    Jaggers_2 Posts: 42 Forumite
    Depends really. If the new loan interest rate is substantially lower it could be worth it. You need to ensure that the penalties for early settlement don't strip out any savings that you would otherwise make. The other caveat I would suggest is that you don't go from an unsecured loan to one that is secured on your property (if you have one). If it all goes thru'penny bits up you don't want to have your home under threat as well!

    I take it you bought the car from someone like Welcome?
  • tilly2484
    tilly2484 Posts: 487 Forumite
    Part of the Furniture Combo Breaker
    I checked it yesterday and i can overpay with no fees which is good!

    No the car is from hartwell ford. I paid £2500 cash and the rest was on finance. I've done the snowball and i can get this paid off by feb next year if i do the plan so that should not be as bad then?
    Be your own superhero :j
  • RAS
    RAS Posts: 33,776 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Lucky you.

    Yes pay off ASAP at that rate.
    The person who has not made a mistake, has made nothing
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