Paying off Loan early - overpaying question

adzsheffield

I have a loan with Sainsbury’s

I had a statement and it currently stands at £8000 and has 3 years to go, if I make extra payments will this just shorten the life of the loan?

Will it also mean that if I pay more or overpay that I will be paying less in interest?

PNPSUKNET

you need to check that it does not have early repayment clauses in it, you maybe best putting the money in a savings acc and then asking for a final figure.

the_first_step

- If you make overpayments you will be payinging off the balance shown on your statement - you therefore will NOT save any money.

-The best is option is to put any extra money to the side and settle the loan in one go. Ring up sains's and ask for a Settlement fig. The settlement fig will be less than your balance as you get a rebate on your interest.

:beer:

marvin

the_first_step wrote: »

- The settlement fig will be less than your balance as you get a rebate on your interest.

This is not always true as some, like Lloyds on my loan accont, give the balance minus interest as a mortgage account statement would be. The amount of loan decreases increasingly as you pay less interest on the loan.

Need to view the T&C of loan to see what it says

the_first_step

marvin wrote: »

This is not always true as some, like Lloyds on my loan accont, give the balance minus interest as a mortgage account statement would be. The amount of loan decreases increasingly as you pay less interest on the loan.

Need to view the T&C of loan to see what it says

I'm not sure about Lloyds.
But I know this is whats happens with Sainsbury loans.

princesspugh

I also have a 10k loan with sainsburys bank with 3 1/2 years left, and wanted to do exactly the same. I rang them before Xmas and was told that yes I could overpay but it would make no savings in what I owed. I was told the best way to do it would be to request a settlement figure when ready then pay it off fully to pay less interest on the loan. So here I am trying to set myself the challenge of saving the 10k in 2010 to get rid of it once and for all. Hope that helps, although maybe your loan is under different terms to mine so still may be worth checking x