Paying off loan early

FrugleRock

Hi, couldn't find a suitable calculator so wondering if anyone could help.

We have £5,681 left on our loan, pay £328.11 per month plus an overpayment of £200.

Do you think we'll have cleared it in about 10 months?


Thanks
Gemx

Tixy

Likely to be a little bit longer than that - though it does depend on the APR of course. On a 15% apr you would be looking at around 12months.

FrugleRock

Oooh thanks for the reply the APR is 7.6%

dtsazza

It depends what the interest rate is, and whether the figure you've quoted is the actual amount outstanding right now, or the predicted amount assuming standard repayments (I don't know if there's a technical term for this). Many banks will adopt the latter but not all - for instance, you take out a £6,000 loan and the balance showing on your account is immediately something like £7,214. One way of telling is looking at the initial balance on your loan statements, and whether interest is added or not.

Chances are you won't have fully paid this off, though. In total your contributions over those months will be £5,281.10 which is less than the amount you state is outstanding. If the interest is particularly high, and the amount is with interest pre-added, then there's a chance that the early repayments will bring the required total down below this level - but I think the rates would have to be unreasonably large for that to be the case.

If you can express the details with the amount outstanding right now, as well as the APR, it'll make the calculations more certain.

FrugleRock

As of 27th April, the balance to pay off is £5,681.44 with an APR of 7.6%

thank you

Tixy

At 7.6% (and assuming the £5681 is the true outstanding amount of capital as said above) then 7.6% would be just over 11months (after 11months of the payments described above you'd just have a balance of about £100 left to pay the following month)

FrugleRock

Fabulous, thanks ever so much for your help Tixy and dtsazza
:T

FrugleRock

Another question!!!

I've upped the overpayment by £200 so it's now £400 overpayment and £328 repayment, can I estimate that we'll pay it off within about 6 months??

Thanks xxx

mustang1

Why don't you have a look at the snowball calculator which will give you an idea of when you will have paid it off with your overpayments. Put the £328 as your fixed payment and the £400 as additional funds

http://www.whatsthecost.com/snowball.aspx?country=uk

Have you checked you can pay your loan off early without any penalty?