unsure what to do

andy51086

hi guys

this is my first post so here goes.

i took a loan out for £6500 for 5 years at 6.7% intrest in april 2006, i pay £126 a month. i have 2 years left on the loan and about £2500 left to pay

i am now on better money and can afford to pay more to the loan i.e £250 to £300 a month.

i need the debt cleared as soon as possible as i am saving for a house and maybe wanting to get a new car

i have got several credit cards that have nothing on them, i have had them for a year or two.

i used them to shuffle around other debts i had at the time, they are all clear now though

so what do you guys think is the best way to pay off the rest of my loan?

thanks :beer:

mikeandrach_2

overpay by the amount you can afford each month, don't get tempted to put on credit cards unless its at 0% for the time it will take you to pay them off, or you get some other reward you would actually use, eg maybe air miles etc

andy51086

the lender of the loan wont allow me to alter my monthly payments though

mikeandrach_2

they may not allow you to alter your monthly payments by increasing the direct debit, but if you were topost them a cheque they legally have to accept it and reduce it from your debt. they may also take payment by debit card. don't let them fob you off, if you present extra money, (ie a cheque) they are legally obliged to accept it

andy51086

ok thanks mate.

does anyone else have any other advice?

i will take yours on board mikeandrach i just like to look at all of my options so please dont take offence

thanks

mikeandrach_2

no worries, i was in similair boat years ago. had a smallish loand that i wanted to overpay and the finance company wouldnt take card etc or increase direct debit. i just sent them a cheque every month and they had to take it.

CLAPTON

mikeandrach wrote: »

they may not allow you to alter your monthly payments by increasing the direct debit, but if you were topost them a cheque they legally have to accept it and reduce it from your debt. they may also take payment by debit card. don't let them fob you off, if you present extra money, (ie a cheque) they are legally obliged to accept it

Can you provide a reference for the 'legally have to accept etc'?

in any event even if they do accept the payment it does not need to be applied to the debt directly and reduce the interest.
So you are better saving the money in a saving a/c until there is sufficient to pay the settlement figure.

Its quite a good APR rate so I'ld concentrate on the saving and then paying it off.

mikeandrach_2

statute law, if you owe somebody money, they have to accept anything you owe them as a deduction from the balance

barclaysguy

can you reference that?

CLAPTON

mikeandrach wrote: »

statute law, if you owe somebody money, they have to accept anything you owe them as a deduction from the balance

maybe, maybe not

but it doesn't have to reduce the interest paid in which case it's not the best strategy

andy51086

so what is the best strategy?

save the extra money up myself the pay the loan in a lump sum once i have enough?