Loan advice for a newbie :)

SyfaClan

Hi everyone - have read loads of advice on here - but this is my first post. I have tried looking for a similar scenario but cannot find one - so forgive me if this has been asked 1,000,000 times.

As a family we have two loans one for 8k with 4yrs left @7.9% Apr (was a 7 year 13k loan) and one at 11k with 5 years left @7.9% Apr (was a ten year 15k loan). One was a consol loan for my partner and the other a car loan quickly arranged. The Apr's changed and it didnt seem sensible to redo for a shorter term.

I am confused - I want to get rid of these as quickly as possible they are both Barclays loans - can I overpay by £100 per month per loan - or is it better to consolidate the two and do over a shorter term? If I am allowed to over pay I can shave nearly two years off each loan by my calc without having new interest charges and save nearly £1500 in interest but is this allowed??

A bit lost - thought I would ask the pros.
- I just don't know what the most sensible route is.

Hope this makes sense!

BoGoF

Overpaying a personal loan doesn't work the same way as overpaying a mortgage. Your loan paperwork should give details of what the early settlement figure would be 1/4, 1/2 and 3/4 through the term. Compare this to what you have already paid and normally the saving isn't that great.

It's also harder to get a loan and harder to get the rates you have.

My advice would be to save what you can afford to overpay, preferrably with a good interest rate and once you have enough to fully clear one of the loans then do so.....then repeat.

SyfaClan

So possibly saving into an ISA for the period may be the best option - on the limited info I have given you? Thank you for such a speedy reply!

BoGoF

Unless the loan APR's are now silly it seems the best option.