Barclayloan - Overpayments?

naylorw

I have recently taken out a Barclayloan for the shortest term allowed (5 years) for £25,000 at a decent rate of 8.7%.

I wanted to take it over a shorter term to pay off quicker but they wouldnt allow me to do this.

Does anyone know if it is possible to keep the extra (say £200 per month) and pay it off the loan every 6 months?

If so does this reduce the term?

I tried speaking to Barclays customer services about this and they wouldnt give me a definate answer on the matter.

Monkeynut

Obviously paying extra would reduce the term you are repaying over.

However check the overpayment penalty terms of your loan. I have a Barclayloan and I believe that the penalty for overpayments is 1 months interest, so I'm doing as you have said as well, and saving up for a few months then making an extra chunk payment so I only get the penalty once.

Tixy

If you have recently taken out the loan then you will be allowed to overpay - but they are allowed to charge you

Loan lenders must let you overpay. If you've spare cash you can overpay each month to clear the debt quicker. Providers can charge you up to 1% of the overpayment (if there's at least a year of the loan term left) or 0.5% (if under). Before, the only flexibility you had was to pay the loan off in full early, usually at a cost of one month's interest, which still stands.

(from http://www.moneysavingexpert.com/news/cards/2011/02/the-credit-card-and-loan-shake-up-what-it-means-for-you)

If you check the T&Cs it should provide you with details as to what they would charge.

naylorw

Thanks very much!