Repaying early

Alz0r

Hi All,

I'm buying a second hand car for £9k, which I will be getting a loan for.

I'm confident I will be able to pay off the loan in full within 3 months, although I will be taking the loan out over 5 years to reduce the capital repayment element.

Am I right in thinking that the lender can charge me 58 days interest for doing this?

Can one of you bright sparks check my workings below please!

Loan Amount £9000
Rate 4.7%
Total Repayable £10 126.76
Interest £1126.76
Interest per Month £18.77 (60 Month Loan).

Am I correct in saying that if I settle up after making 3 payments the cost to me (ignoring the capital repayments) WOULD NOT BE 3 x £18.77 as the interest is calculated on the outstanding balance rather than just equally divided over 60 months?

The site linked below suggests the following figures to be correct, can anyone confirm ?

Loan Amount 9000
Term 60 Months
First Repayment 168.78
Second Repayment 168.78
Third and Final Repayment 168.78
Total Payments 506.34

Settlement Figure 8664.47

So I borrowed 9000, paid 506.34 back before clearing 8664.47
8664.47 + 506.34 = 9170.81

Meaning I paid £170.81 for 3 months interest (which I'm OK with).

(I can't link the site, just Google Financecalcs and click Settlement Calculator.)

And just finally, apart from the obvious "just wait till you have the money and don't get a loan" option, is financing this purchase this way the best way of doing it?

Thanks for any replies