Saving loan interest

Mozette

I have a personal loan, but I've just got a better rate from another provider; I gather that if I pay off the bulk of my existing loan, then let the final couple of payments be made via DD as normal, that it will save me interest; is that correct? The redemption figure of my current loan is £300 odd more than the current outstanding amount - I assume that is the interest, and well - £300 is £300!

jonesMUFCforever

No I don't think so in the way you think.
By doing what you are doing you will avoid most of the early settlement fee.
The interest will be calculated on a daily basis and is not front loaded.

Mozette

Thanks for that, I thought it somehow reduced the interest, but that makes sense of course, it's the early redemption fee that I can avoid.
Great; I'll do that.

CLAPTON

Mozette wrote: »

Thanks for that, I thought it somehow reduced the interest, but that makes sense of course, it's the early redemption fee that I can avoid.
Great; I'll do that.

it does, of course, reduce the interest you would have paid had you allowed the loan to run its natural course