Do I repay loan or save the money??

ggooders

I took out a loan with NatWest for £10,000 two years ago this month. I have two more years to go on it and its at £5,900 at the moment. The interest was put on up-front.
I can't decide whether to keep making my repayments and complete the 4 year term of the loan or to pay it off. If I did so, it would mean literally living by what I earn each month, no savings or cash to fall back on as I would be scraping the pennies together to repay the loan in full.
What do people recommend to do? Part of me thinks that if I don't have a hefty loan repayment to make each month I should be able to live off of what I earn more easily?
Any advice would be great!
G

CLAPTON

the interest was not put on up-front althought the CCA rule insist that lenders show the full amount to be repaid (i.e. capital plus interest).

you will get an interest 'refund' if you settlement early

the rest seems to make no sense to me

MarsdenCuckoo

As Clapton says, you should pay less interest if you settle your loan early but not all loans work like that e.g. DFS. Ask for a settlement figure and then see how much you'll be saving against how much you could get in interest if you put your monies on deposit somewhere. Am guessing that won't be much but still.....

Of course, if 'having more to live on' means you'll be squandering it then it could be better to continue scrimping and saving to get by!

Good luck.

Rob71

ggooders wrote: »

... living by what I earn each month, no savings or cash to fall back on...

If you've got debt (and I'm guessing this loan is probably a couple of hundred quid each month), clear it with your savings and rebuild savings with the money you would have paid the debt with.

What's the APR on the loan and how much would you be able to get out of savings?

You might be able to pay some of the debt (and keep some savings) - that'll reduce your outgoings -try speaking to Natwest about it.