Should I pay the loan off?

K40LGH

Hello,

I am new to this forum so apologies if this isn't the correct board to post this on...

My partner and I have recently paid off his loan as we had saved enough up to do so and still have some savings left. We are now wondering whether or not to pay mine off, which would mean being loan free, but with no savings left except a few hundred.

We currently own a 30% share of a 2 bed house (pay rent on the 70%) and want to move in the next 12m or so. The loan has got 16 months left on it.

Thoughts/suggestions?

Thank you in anticipation.

[Deleted User]

Doesn't make sense to have a loan while you have savings (on the assumption that the loan rate is higher than your savings rate). And in 12 months, you can divert what you were paying on the loan to your savings account.

RuthnJasper

Pay off the loan now, whilst you can. Should anything change for the worse in your personal financial circumstances (which, hopefully, won't actually happen to you) then at least you won't have to worry about this loan.

Maybe pay it all off and put what the newly non-existent loan would have cost you in interest each month into the savings account...?

Best wishes. x

moatmeister

Whilst first principles say it is pointless having a loan if you also have savings, do you foresee the need for any ready cash in the future? If so dont assume that if you pay the loan off you will automatically be able to get a replacement for it. Peoples circustances change for better or worse. And the sneaky lenders move the goal posts all the time!!

opensomehours

Pay off your loan while you can! Otherwise it'll always be a burden hanging over you on whatever you decide to do in life. As RuthnJasper stated previously, you never know what surprise problems could occur and trip you up, leaving you in a very troubling situation.

Best of luck