Over Paying a Lloyds Loan

rhealy2002

Hi,

Long term lurker,

Just a quick question, my lloyds advisor said I could make over payments to my new loan, but never mentioned if the interest overall would be lower. So my question is, if I make over payments, will the overall interest on the loan be less then paying over the full term of the loan ?

asandwhen

rhealy2002 wrote: »

Hi,

Long term lurker,

Just a quick question, my lloyds advisor said I could make over payments to my new loan, but never mentioned if the interest overall would be lower. So my question is, if I make over payments, will the overall interest on the loan be less then paying over the full term of the loan ?

Yes - your interest is calculated daily with a Lloyds loan so is the best value if your thinking of overpaying - you monthly payment will remain the same but the end date on the loan will change.

If you wish to pay a Lloyds loan off early without incuring any charges then its best to pay off all but 1 months payment and let the last month go out as normal. HTH

Mags_cat

asandwhen wrote: »

If you wish to pay a Lloyds loan off early without incuring any charges then its best to pay off all but 1 months payment and let the last month go out as normal. HTH

Yes - that's what I did with mine. You can get the account number and sort code from Lloyds to make the overpayments by standing order but cancel it when the balance is below one month's normal DD. They then take the last payment by DD and you don't get charged a penalty. As said above, you will have saved interest because you'll have paid it off earlier.

kavics17

I called them every time and made an overpayment with a debit card. As for interest, I left £25 on the loan account and called for a settlement figure, they charged me £1.05 interest penalty which I was happy to pay for.

rhealy2002

Evening Guys/Gals

Thanks for the info, this will help me clear my debts quicker, just wanted to understand the benefits of paying this of early, and if that means paying less interest, thats great

Lady on the phone wouldn't increase my shadow limit when I was taking the loan out with the advisor, so had to increase the years from 4 to 6 , thou I could afford the payments for 4 yrs, since I live at home and on a pretty decent wage.

Oh well lets clear this debt