Can I overpay on a fixed loan?

sc6_2

Hi everyone
am brand new to this - only found this site a couple of weeks ago and am seriously hooked!! This is my first post. Wish I had found it years ago - used to think we were the only ones with mega debts - never told anyone- ashamed to admit it. :eek: I feel like we are among friends here.:j

I have already learnt so much - have done the credit card shuffle and got all my cc debt onto very low rate life of loans or introductory offers. (am reluctant to try for new 0% cards as the last time i tried (about 2 years ago) i got turned down (think it was Tesco and Goldfish) they said it was to prevent me being overextended.:rolleyes:

Have also become a big fan of the OS board and everything we eat is now homemade - and saving a packet!!:j

My question is ..(finally I hear you all say!!!)...can i overpay on a fixed term loan? I have a loan taken out four years ago with Intelligent Finance that has another four years to go and the interest rate appears to be 9%. I currently owe £8200. I cant see anything in my award notice or on their website about penalties if you pay back early.

The only cards i have left with nothing on them are an IF card and a Mint one (dont even know which bank that is!!) and will soon have a paid up Egg one. I cant remember what my credit limits are on them but probably not be enough to transfer even if they had any offers for existing customers(and I wouldnt be able to xfer from IF loan to IF card i wouldnt think) so i was thinking how about if i started to overpay my loan - say by about £20.00 a month? (not a lot I know but it all helps)

Can I do that? And even if there was a redemption penalty - what if i just quietly overpaid without asking to close it until it was paid back - or what if i asked them a month before it finished - when the interest left would be really tiny? Hope i am making sense and would appreciate your sound advice.

x_raphael_xx

Hiya,
If you overpay what they usually do is postpone the next payment until the date youve paid up til.
Ie, if you pay usually pay £50 a month and decide to pay £100, then the next month they wont take anything as you've already paid, so they'll skip a month.
The best way to pay it off quicker is to do what I do...put it onto your credit card instead, that way your interest on your credit card goes down as well, then after a few months ask for a settlement figure for the loan. If you have enough on your credit card then pay it off.
Usually if you settle early they will re-adjust your interest on the loan and you might end up paying back less, but Id read the fine print to check.

Good luck

sc6_2

thanks for that raphael- wow arent they sneaky!! Never thought of that!! Def dont want to do anything which doesnt help in the long run. Yes - that is a solution - paying extra off a cc and then putting loan on when i have enough credit. think its time to review the old cc's again - and maybe ring IF and find out exactly what i did sign up for!!