paying off a loan early help!

fables

Hi all. Not very clued up on all this and despite reading am confused! The yorkshire bank has no early redemption charge for paying off a loan early. I know in January I will be able to pay off the loan I get in full. So would I be able to take out a loan that is spread across say 3 years as oppose to 1 year to reduce the amount I pay each month up untill January, without incurring any charges ect. I haven't appied for anything yet. Thank you for any help!

pumpkinhead456

Hello!
In theory yes. However if you take out a £3000 loan over 1 year at 9% APR you would be paying £261.87 per month and £142.44 in interest for the year. If you were to spread the same loan over 3 years it would cost £94.91 per month and £416.76 in interest.
So between now and January you would be paying a wee bit more interest if you had spread the cost over 3 years but the monthly payment would be much lower. Obviously your final payment in January will be much less if you took the loan over 12 months.
So just whatever suits your circumstances bearing in mind your monthly cost, interest paid until January and how much the final redemption amount will be in January.