Car loan

Kench79

I have a car loan through Blackhorse. The total loan was for £8500, and the total repayable is £12,200, over 5 years.

I plan to make overpayments to pay it off over 18 months (which Blackhorse allow) to reduce the interest.

On My Noddle account the "opening balance" shows as £12,200, if I make overpayments will this opening balance reduce to reflect the reduced interest? I don't want to clear the loan but for the total amount repayed to show as less than the opening balance on my credit report.

dealer_wins

The opening balance wont reduce, as £12200 was the opening balance. Each month Noddle takes a snapshot of the balance, which will (hopefully) show as reducing faster than the agreement due to your overpayments.

Pipz

As you overpay each month you should receive an interest rebate.

As DW says the opening balance won't change but your current balance will reflect the effect of regular payment + overpayment + rebate rather than just the regular payment.

Once you pay off the loan in full, if you subtract the total of your interest rebates from the £12,200 you'll end up with what the loan actually cost you,

Kench79

Thank you!

thebritishbloke

Pipz wrote: »

As you overpay each month you should receive an interest rebate.

As DW says the opening balance won't change but your current balance will reflect the effect of regular payment + overpayment + rebate rather than just the regular payment.

Once you pay off the loan in full, if you subtract the total of your interest rebates from the £12,200 you'll end up with what the loan actually cost you,

I'm not entirely sure if this is true. With some car financing they front-load all of the interest, so you basically have no option but to pay the interest. It's unfair, but it's what they do.