Tesco Loan repayment advice

dbarcl10

I recently took out a loan with Tesco for some home improvements.

Loan £8,500
Interest Rate 7.1%
Period 9 years
Repayment £105 per month

Rather than be paying this for 9 years, I'm hoping to reduce payments to monthly regular savers to the minimum and instead pay additional payments to my loan account. With Tesco overpayments are allowed and can either reduce the monthly repayment keeping the same term, or keep the monthly repayment and reduce the term - I'd be looking to reduce the term.

Most months I'd be looking to pay an extra £350, meaning £455 would be repaid rather than £105 a month.

Tesco charge up to 2 months interest on early settlement, so if I paid £455 per month, would the final payment be considered early settlement, and therefore the extra interest would kick in? If so, is this normally calculated on the outstanding balance when paid off or on the original value or some other calculation?

I'm also considering using an ISA to pay off a whack of the loan when the ISA matures in December, so I might be able to settle the loan by April 2014.

I'm planning on phoning Tesco to check later in the week, but in trying to get this straight in my mind before phoning, so any advice would really be appreciated!

Thanks!!

ch3101

Well what to do is set up a standing order for £350. when it gets to the point where you have less than that left then you would just pay it off.

Remember - When you owe only 1 monthly payment then there is basically no interest left so you don't need to worry about the 58 days charge.