hope this isn't a stupid question

elbereth

Quick question, I have an unsecured personal loan with lloydstsb and was wondering if I pay off extra amounts does this reduce the final amount that I will pay or just the term of the loan. Am sorry if this is a silly question, have looked through all the paper work but can't seem to find the answer.

Cheers in advance
elbereth

josephine82

Hi! :j

I don't know about LLoydsTsb but I know that with Halifax and Tesco if you pay off extra that amount just goes off the final balance and it will reduce the term of the loan not the payment amounts.
But its worth ringing them up and asking though!
Jo

pixiechick99

I've got a Lloyds loan which they let me make overpayments on, but this just shortens the length of the loan, monthly payments stay the same.:D

elbereth

thanx guys, I will give them a ring and clarify, it seems everytime I go in they try and give me more credit so I try and stay away!!!!!

MoneySaver82

Hi
New to this board but found this thread while searching for advice re: lloyds personal loans.
I changed around my loan a couple of months ago to combine some credit card debts and they said no problems with making overpayments at any time, just come to the counter and ask to pay it off your loan.
Sorry to ask a really silly question but if I make a payment does this come off the loan amount or the loan amout + interest??
ie. if my loan was £2,000 but the final amount paid with interest would be £3,100, if i made a £500 overpayment, would this come off the £2,000 leaving me to pay only £1,500 plus any interest of would this just come off the total i'd pay if i hadn't made overpayments - ie i'd still have to pay £2,600?
This prob sounds silly - cos if you still pay the same total amount then there'd be no point making overpayments, we'd just save the money and then make an early settlement when we had enough? Just wanted to check tho!
Thanks in advance!

psychopathbabble

Do you get charged for making overpayments on a lloyds tsb loan? might be worth checking! if not, i'll be doing the same... didn't think you could do overpayments for some reason!

smokybabe

I spoke to Lloyds last November about paying extra off my loan and they said it would be no problem and that I could pop in and pay an extra amount each month, it will reduce the term but not the monthly repayments. No charges for doing this.

HTH.

MoneySaver82

So does this mean you pay less interest overall by making the overpayments - think this is basically my question?

K_and_N

Hi,

I don't know about Lloyds. But when I called Natwest re: my personal loan, they said the interest will not be reduced (because it is contractual). Only the term will be reduced. So I decided to save up in my offset mortgage account and pay off the loan in full when I have enough.

Hope it helps.

K and N

handyman123_2

elbereth wrote: »

Quick question, I have an unsecured personal loan with lloydstsb and was wondering if I pay off extra amounts does this reduce the final amount that I will pay or just the term of the loan. Am sorry if this is a silly question, have looked through all the paper work but can't seem to find the answer.

Cheers in advance
elbereth

I'm not an expert, but it sounds to me that you are asking if the faster you pay the balance will you pay less intrest?
I believe that some loans are front loaded i.e the intrest is added to the amount borrowed and that is the amount you will pay regardless of how quickly you pay it off, it will shorten the life of the debt.

You can contact the lender and ask if they will accept an early settlement, some used to charge a penalty for this against loss of intrest. If they will accept an early settlement? why not pay them the agreed amt each month and save the extra somewhere where it will make money, then pay of the loan in one hit.

If I'm talking out of my ears, then at least I've bumped you back up where someone with more knowleged may be able to help.

Regards, handyman123.:)