Decisions... Decisions...

rdchick

Just wondering what you guys think...

I have a loan with Halifax, however I would like to pay this off before it's end date of 2018 :eek: so I am thinking should I set up a little savings account, get the £3500 ready in that and then just pay it off or should I get a little account somewhere and squirrel away the money but not gain any interest?

Also, do Halifax credit check you for a savings account if you already have an account with them? they keep throwing one in my face everytime I log in... (Pretty much all my debt is with Halifax so having a savings account with them to pay off their debt surely isn't going to make much difference - ie: take your money to pay themselves.. see what I mean?

Thanks in advance guys, don't know what I'd do without you all xxx

Million_Percent

I'm not sure you get credit checked for a savings account. It's not a form of credit is it? A savings account won't have an overdraft and if you open one with no minimum deposit then there is no need for them to check any details of you finances.

If your loan allows you to overpay that would be the best option as it will save you interest in the interim. If you need to save up and settle in full then I'd go for some form of ISA and save up in there.

rdchick

Thanks, that's what I've heard too but I think they just clarify that you're not a fraudster - they will let you but you have to call and ask basically so want to pay off like £1000 at a time, is that a good idea? rather than say can I pay an extra £40 in today please... does that make sense?!

Million_Percent

Unless making the overpayments is a real pain in the backside, I'd be tempted just to do it monthly. Work out how much you can overpay and phone up each month to make the extra payment. That will be the most cost effective way although there may not be much in it compared to your alternative of saving up and paying off in larger chunks. Have you checked if there are any limitations on overpayments? It might be that you are not allowed to overpay more than a certain amount in a given month which might rule out the second option.

rdchick

Yeah I guess I should find out more about overpayments first - I know you can just pay it outright because over a year has passed and they have taken a massive £1500 in interest already (it's only just had a dent into the actual balance as of this month!) and works out that currently £77 of my £96 a month payment is interest :eek: