Loan For Car, info

PedroMatias

CLAPTON wrote: »

no this makes absolutely no sense;

if you make an overpayment it will reduce the capital amount owing and so will reduce the interest charged;

normally however, the monthly payment will remain unchanged although of course the loan will end a lot earlier.

Sorry, you're wrong. Most loan companies will not discount the total interest owed when you overpay, only if you settle in full. The total interest is calculated at the start of the loan, and is not recalculated unless you settle. In effect, you're still paying the interest for the full original duration of the loan - it's better to keep any overpayments in a savings account until you can settle in full.

CLAPTON

PedroMatias wrote: »

Sorry, you're wrong. Most loan companies will not discount the total interest owed when you overpay, only if you settle in full. The total interest is calculated at the start of the loan, and is not recalculated unless you settle. In effect, you're still paying the interest for the full original duration of the loan - it's better to keep any overpayments in a savings account until you can settle in full.

the rule changed in jan 2011
now all loans must apply the same rule to overpayments as they formally gave to early settlement

PedroMatias

CLAPTON wrote: »

the rule cahnged in jan 2011
now all loans must apply the same rule to overpayments as they formally gave to early settlement

My apologies, I stand corrected! Bad few days at the office, they've turned me into a right grump

polo-mk3

WaxiesDargle wrote: »

Just been on the Halifax site and for a 7 grand loan over 48 months it is 7.8% and that is £169.51 per month.

Im with halifax too.

Dam you, you got a better intrest rate then me :mad:, lol

WaxiesDargle wrote: »

It does allow for early repayment but says you may have to pay up to 56 days interest back

Mmmm ok

polo-mk3

CLAPTON wrote: »

the rule changed in jan 2011
now all loans must apply the same rule to overpayments as they formally gave to early settlement

Thanks Clapton

~Brock~

CLAPTON wrote: »

the rule changed in jan 2011
now all loans must apply the same rule to overpayments as they formally gave to early settlement

Clapton is correct, but there are caveats to this - the lender will not automatically treat any overpayment as a partial settlement, you must request this to be done yourself.

Also, the lender has the choice of either shortening the remaining term or keeping the original term and reducing the monthly payments.

More info from the links on this page.