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Overpayments??
angel31572
Posts: 123 Forumite
Hi all
I read something very briefly a few weeks back about making overpayments on loans each month.
How much of a difference can this make and does anyone have a story to tell? Thanks....
I read something very briefly a few weeks back about making overpayments on loans each month.
How much of a difference can this make and does anyone have a story to tell? Thanks....
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I think I must have read the same thread, from what I can remember it made a significant difference - I know I was quite surprised. Can't remember who had posted the thread though. Sorry!0
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Hi GirlRacer
Thanks for replying anyway..it will keep the post up so that someone in the know might reply!
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I don't know if its any use, but I have just found this site http://www.themoneypages.com/apps/calculators/fleximortgage.asp It's about overpayments on your mortgage but if you type in your loan amount, the apr and the repayment term and how much you want to overpay it seems to work it out for you.
Give it a go - nothing lost.
HTH0 -
Its a great idea.
Only word of caution is that you cant do it on all types of loans.I am a Forum Ambassador and I support the Forum Team on Mortgage Free Wannabe & Local Money Saving Scotland & Disability Money Matters. If you need any help on those boards, do let me know.Please note that Ambassadors are not moderators. Any post you spot in breach of the Forum Rules should be reported via the report button , or by emailing forumteam@moneysavingexpert.com. All views are my own & not the official line of Money Saving Expert.
Lou~ Debt free Wanabe No 55 DF 03/14.**Credit card debt free 30/06/10~** MFW. Finally mortgage free O2/ 2021****
"A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
***Fall down seven times,stand up eight*** ~~Japanese proverb. ***Keep plodding*** Out of debt, out of danger. ***Be the difference.***
One debt remaining. Home improvement loan.0 -
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Any other views? 0
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From how I understand it, it goes something like this:
Each payment you make on a loan pays a bit off the interest and a bit off the actual amount borrowed (the capital); near the start, most of your payment's interest, near the end it's mostly capital.
If you make an overpayment, it goes against your capital. So if you overpay by a hundred quid, that's £100 less to be charged interest on next month. It adds up rather quickly, and makes for big savings.
Let me know if I got confused anywhere
Debts (26.3% remaining) - CC/BARC: [strike]2058[/strike] 100.00 @0%; CC/MBNA: [strike]1877.75[/strike] 0.00; Loan/SLC: [strike]10000[/strike] 7901.84 @1.5%; Loan/Per: [strike]1500[/strike] 0.00; Loan/HX: [strike]15000[/strike] 0.00
Mortgages (94.7% remaining) - NW: [strike]92516.94[/strike] 87565.40 @3.19%; HBOS: [strike]65599.57[/strike] 59106.45 @4%, [strike]69251.57[/strike] 68589.97 @3.49%
Total amount of fail: Dangerous (223263.66)0 -
You know, according to that calculator if I paid an extra £360 a month, I'd be mortgage free in less than 10 years!!!! Mortgage free at 36!! IF ONLY!
Sadly, while my babies are so young (Ben is 5, Owen 3) it's clearly not possible, but in the future if we play our cards right, who knows?DFW #414, MoneySaver, Income Booster
It Always Seems Impossible Until It Is Done.
£2,022 in 2022 #39 - Current total £2.900 -
KellsBells wrote: »You know, according to that calculator if I paid an extra £360 a month, I'd be mortgage free in less than 10 years!!!! Mortgage free at 36!! IF ONLY!
Sadly, while my babies are so young (Ben is 5, Owen 3) it's clearly not possible, but in the future if we play our cards right, who knows?
Exactly - these calculators just go to show how much we can reduce our overall debt repayments by if we are able to pay a "relatively" small amount extra each month.
OK, so I know that it is hard to find the extra, but even throwing an extra £10 a month at a debt can make a difference, and although the children may be young now you could still perhaps be free of that mortgage by the time you are 40 (ish)!
How cool would that be?Successful women can still have their feet on the ground. They just wear better shoes. (Maud Van de Venne)Life begins at the end of your comfort zone (Neale Donald Walsch)0 -
The thing with loans is it depends on what type it is. Some loans have all the interest you will pay for the life of the loan loaded on at the beginning of the loan term. So even if you overpay you won't pay any less interest. On others the interest is worked out daily so overpaying would work.
Sorry to put a downer on your idea
chevI want a job that is less than an hour driving away from my house! Are you listening universe?
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