should I pay this amount off?

mtm81

Hi,
I have an outstanding car loan of just over £6k (that's the total I'll pay when the loan completed in 2010.


At this moment in time I have savings totalling £3000.

I telephoned the loan provider to see how this would affect my loan. She said that although it would reduce my term, the actual amount I'd end up paying would be the same £6k+. But yes, my end loan date would dec 2008.

However she said, if I had the full amount, then I would only have to pay £5400 as I would be rebated the extra interest.

Should I wait until I've got the £5400 to pay off the whole thing? or pay what I have now?


James

ascollen

You'll be no better off if you pay what you have now, so my advice would be to grow the lump sum, build on the interest in your savings and then clear it when you have the full amount.

mtm81

ok - but taking the interest paid issue out of the equation. By paying off my lump sum now.. I reduce how long I have the extra £xxx coming out of my bank every month in terms of the time.
By a nearly a couple of years.

I guess I'm just conerned that by the time dec 2008 comes along I still haven't saved enough to clear the whole thing and so are still paying it!