Personal Loan Advise Please

AMG762

Hi,

Please would somebody confirm my understanding of the personal loan offer as described below? I am looking to borrow £4k over 5 years (to keep the monthly payments low). But am hoping to receive money in a couple of years time to repay the loan in full.

The loan offer is with Barclays

£4000 over 60 months
Monthly Repayments: £96.93
Total Repayment: £5815.80
Interest 16.9%

After 2 years of payments I would have repaid £2326.32.

Barclays have said the loan has an early repayment fee of one months interest.

My question is does that mean after 2 years It would cost the following to repay:

£5815.80 - Total Repayment over 60 months
-£2326.32 - Would have repaid over 24 months
=£3489.48

So would it cost £3489.48 plus one months interest to clear the loan?

Thanks for any help

jonesMUFCforever

NO.
Interest is calculated daily so you pay more interest in first half of loan and less capital.
After that the reverse happens.

AMG762

Thanks for your response, would you be able to give a very rough estimate on what it would cost to repay after 2 years please?

jonesMUFCforever

You would need to set it up in a spreadsheet - sorry haven't time to do it.

CLAPTON

in the early stages of the loan you pay a lot of interest as you owe a lot of money; the amount of interest then declines... that's the bad news

the good news is that if you repay the loan early you get a rebate on the interest that would have been due after the early settlement

so after 24 months you would have to pay about 2,900 ish to settle the loan

AMG762

CLAPTON wrote: »

in the early stages of the loan you pay a lot of interest as you owe a lot of money; the amount of interest then declines... that's the bad news

the good news is that if you repay the loan early you get a rebate on the interest that would have been due after the early settlement

so after 24 months you would have to pay about 2,900 ish to settle the loan

Thank you for that,

works out a bit cheaper than i thought