interest on loan.

amyanderson123

I would appreciate if anyone could give me some advice about my loan. I recently got a statement after paying my loan for 12 months and it says that i have been paying over £300 in interest whilst only a £100 off my actual loan amount. Is there anything i can do about this?

intranicity

How much did you borrow, over how long at what rate?

keith1950

Hi, at the start of a loan you are paying mainly interest and as the balance ( slowly ) reduces there is less interest so the balance starts to reduce more quickly. An example I was given for this was, with a 25 year mortgage after 15 years you have only paid off half the original sum. All you can really do is try to search for a lower interest loan and use that to pay it off.

redpete

If the lender allows it you could overpay - any extra comes straight off the capital, will reduce the interest each month and means that more of the monthly payments goes towards paying off the capital.

pitersmith

I have no idea, what is the exact loan amount of your, but it sad to know only 100 was paid from the real amount. This is the worse side of interest base loan system. People get tired to pay interest and they do not get the chance to pay the real amount.

amyanderson123

amyanderson123 wrote: »

I would appreciate if anyone could give me some advice about my loan. I recently got a statement after paying my loan for 12 months and it says that i have been paying over £300 in interest whilst only a £100 off my actual loan amount. Is there anything i can do about this?

My loan amount was 23,000 but dont know what the interest rate wasand it is over 7 years, the person in the bank i was dealing with at the time said it would be quite high but she would get me the best deal.

intranicity

amyanderson123 wrote: »

My loan amount was 23,000 but dont know what the interest rate wasand it is over 7 years, the person in the bank i was dealing with at the time said it would be quite high but she would get me the best deal.

£23,000 over 7 years, paying approx £400 a month would mean you actually borrowed approx £33,500 at 12% including interest.

At the start of the loan you are paying off more interest rather than capital, around half way through the loan it would be equal and towards the end, you'll be paying off mainly capital and little interest. Thats the way loans work.

Did you agree to pay £400 a month for 7 years? If so, then thats what you're paying, all you can do is try for a cheaper loan, but you need to see what penalties there are for early repayment

amyanderson123

intranicity wrote: »

£23,000 over 7 years, paying approx £400 a month would mean you actually borrowed approx £33,500 at 12% including interest.

At the start of the loan you are paying off more interest rather than capital, around half way through the loan it would be equal and towards the end, you'll be paying off mainly capital and little interest. Thats the way loans work.

Did you agree to pay £400 a month for 7 years? If so, then thats what you're paying, all you can do is try for a cheaper loan, but you need to see what penalties there are for early repayment

Thanks for the advice.