Pay my loan off early

rtho782

Front loaded interest doesn't happen any more, so you only pay interest for the time period that you have the loan.

Generally, if you make overpayments or an early settlement, you pay 30 days interest on the amount you've paid off.

As an example, I took out a Halifax loan about 4 months ago for £1000 over 24 months, repayment about £53 a month.

Last month, lets say 01/06/2012, I paid off an extra £500. This amount reduced the amount on the loan (and therefore leaves me with about 6 payments to make) and the interest on the chunk I paid off continues to be charged until 01/07/2012.

If I'd done a full settlment I'd pay the intest for 30 days as well, so it doesn't make much difference. I'd save slightly by clearing the lot but could only afford to clear £500!