Loan - Early Repayment

apsx

Hello all,

I will be purchasing a car in a few days time.

I wish to take a loan of around £7-7.5k out to pay for it, spread over 5 years.

I would like to make additional payments each month depending on how much I need to spend (most of my salary is disposable).

My understanding is that the bank will reduce the loan amount, and reduce the total interest payment?

Does this sound like a good idea?

Basically I can afford the re-payments but want to flexibility to pay back larger amounts.

benlad

Zopa allow you to overpay by debit card.

CLAPTON

borrowing 7.5k for a car is a bad idea
howeverr, if you are going to borrow the repaying early is a good idea
all normal personal loans allow you to pay early or make overpayments although some charge a 50 day interest penalty.

Common_Sense_2

For all new loans, under the new Consumer Credit Directive, all companies must allow you to 'part settle' which means that if you make an overpayment, it will restructure the loan making it cheaper in the long run. You just have to make sure that when you make the overpayment you state clearly that it is as a part settlement.

Have you tried the dealer finance options?