Paying off a loan early - advice please!!

petya_2

Hi guys,
i am new to this so please bear with me.
I took out an unsecured loan 7 months ago for 6K over 60months on 8.7%

I want to pay it off early( with a 0% BTcard) but was told that there will be early repayment charges. Then a friend told me that I can just pay off a big chunk of it but leave some ( say £300) and they can't charge me early repayment charge! When I rang the bank they said that they can't advise on this...:mad:

has anybody tried that?

Thanks in advance!

andymc29

If they said they can't advise on it then your probably fine to do it. They may charge you some extra interest though for making a large payment.

petya_2

I just spoke to the loan people again and asked them if there will be any charges if pay off £1400 in one go. THe answer was no, but "no savings on the interest will be made, just the term of the loan will be reduced!" But doesn't this mean that when the loan ends ealy I will be making savings on the interest amount!!?? I am totaly confused! :-(((((:(

discoass

petya wrote: »

I just spoke to the loan people again and asked them if there will be any charges if pay off £1400 in one go. THe answer was no, but "no savings on the interest will be made, just the term of the loan will be reduced!" But doesn't this mean that when the loan ends ealy I will be making savings on the interest amount!!?? I am totaly confused! :-(((((:(

i just paid 9000 off a 9360(settlement figure)loan left it a couple of days then requested another settlement figure and was told i owed £163 saving myself 200 quid as they only penalised me 2 mnths interest on the remainder not the full loan

Xbigman

You need to check the terms and conditions of the loan. If extra payments are allowed without penalty then you can indeed pay off 99% and save yourself the settlement fees (which it sounds like your loan does). If you tell the bank you are doing this they will try to put you off, SO DON'T TELL THEM. Just ask what the outstanding balance is, then pay off all but one months payment plus £50. You should then just sit back and they take the odd amount two payments later. I've done this 4 times now. 3 times it worked perfectly and one they took a full payment (rather than a final part payment) then refunded it a week later without asking.
Regards



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