Paying off loan early?

Bathams

I have a Lloyds loan I want to pay off early. I have been told that if I pay off the majority of the loan and leave, say £100 to pay I may get away without all the additional interest payments. True or false.

ViolaLass

For goodness' sake people, either you're trolls or you're idiots. Stop asking strangers on a message board - talk to your loan provider! We can only guess; they will know.

CLAPTON

Bathams wrote: »

I have a Lloyds loan I want to pay off early. I have been told that if I pay off the majority of the loan and leave, say £100 to pay I may get away without all the additional interest payments. True or false.

basically loans work this way

if a loan is paid off early in full then you have to pay the capital owing plus a maximum of a couple of months interest.
This is 'presented' in different ways by different lenders but in essence the result is the same.


some loans will allow part payments and some will not.
if a loan allows part payment without any penalties then yes if you pay off most of the loan and then later make a final payment then you only pay a little interest as it's based on the now small balance.

I'm not familar with your specific loan but read the T&Cs about overpayments and early settlement.
For early settlement you will need to get a figure from your lender

CLAPTON

ViolaLass wrote: »

For goodness' sake people, either you're trolls or you're idiots. Stop asking strangers on a message board - talk to your loan provider! We can only guess; they will know.

bizarre................

Bathams

Many thanks Clapton, information appreciated, in spite the other rant. Cheers

ViolaLass

CLAPTON wrote: »

bizarre................

How so? If I had a question about my loan, the obvious person/company to approach would be my loan provider who would KNOW what the terms of my loan were. Why ask a stranger who can't know?

CLAPTON

ViolaLass wrote: »

How so? If I had a question about my loan, the obvious person/company to approach would be my loan provider who would KNOW what the terms of my loan were. Why ask a stranger who can't know?

how so... well

firstly, it seems very reasonable on a forum to do with loans for some-one to ask a question to do with loans

secondly, not very one understands the diffferent rules to do with early settlement and over paying, or indeed about interest penalties or how they are calculated

thirdly, whilst it is obviously essential to ask the loan company for an actual settlement figure, it less clear you will get a proper answer to how to reduce the interest penalty payment.

The boards are full of posts about people asking service / bank staff and getting incorrect info and making poor decision based on the advice.