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Loan Query
Hi there!
I am planning on getting a loan for £5600 to help with car purchase. The plan is to take it over 4 years. The cheapest rate is 5.7% APR with monthly payments of about £130. There is an early redemption penalty of 1 months interest. The total interest payable is £682. I take it that the penalty is 682/48 = £14.21?
My plan is to pay the loan back in full in 2008, i.e. 2 years into the loan (when I have guaranteed money coming to me). Any advice? Does this seem reasonable?
Thanks.
I am planning on getting a loan for £5600 to help with car purchase. The plan is to take it over 4 years. The cheapest rate is 5.7% APR with monthly payments of about £130. There is an early redemption penalty of 1 months interest. The total interest payable is £682. I take it that the penalty is 682/48 = £14.21?
My plan is to pay the loan back in full in 2008, i.e. 2 years into the loan (when I have guaranteed money coming to me). Any advice? Does this seem reasonable?
Thanks.
0
Comments
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I don't agree with your calculation. You are just avereging the figure.
If you pay the loan off early - you will pay more off in first year as you will owe more so repayment penalty will be more and vice versa.
There is a way of avoiding this altogether as long as your loan company allow overpayments. Pay off whatever redemption figure minus one month, and let the d/d go through as normal.0 -
why not just wait under 2008 and buy second hand/new car when garaunteed money received- no loan and no debt.0
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