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Paying off car loan early

Hi all,

I want to pay off my car loan with Santander early the Apr is 8.4%

What's the best way to pay it off? Do I save and make a full and final offer or do I over pay each month?

I have checked with them there is an option to make overpayments and there is an option to make a full and final offer.

From next month I can afford to overpay a minimum of one months payment. Just need advice really on which way do it?

Thanks in advance any advice, opinions welcome. Xxx

I have asked this question in my diary too sorry for duplicating xx
3rd LBM July 2014: Debt [STRIKE]£31,416.68[/STRIKE] Down To: [STRIKE] £23,403.43[/STRIKE] [STRIKE]15th July: £25,709.83[/STRIKE] 26th March: £31,229.68
CC £0 :j WFTC £1660, SLC £6600, Car £18,654, Emergency Fund £1,000 :T

Comments

  • sourcrates
    sourcrates Posts: 30,655 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    They will have a pre-arranged formula for ending an agreement early, off the top of my head I think you can save on the amount of interest you pay in total, you will have to refer to the terms and conditions of your loan agreement to get the exact details.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts 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 and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Thanks sourcrates x
    3rd LBM July 2014: Debt [STRIKE]£31,416.68[/STRIKE] Down To: [STRIKE] £23,403.43[/STRIKE] [STRIKE]15th July: £25,709.83[/STRIKE] 26th March: £31,229.68
    CC £0 :j WFTC £1660, SLC £6600, Car £18,654, Emergency Fund £1,000 :T
  • Hi all,

    I phoned them if I overpay per month interest is not recalculated so will pay back exactly the amount borrowed. If I save I can make a lump sum then they deduct any outstanding interest.

    So it's better if I save then make a lump sum payment.
    3rd LBM July 2014: Debt [STRIKE]£31,416.68[/STRIKE] Down To: [STRIKE] £23,403.43[/STRIKE] [STRIKE]15th July: £25,709.83[/STRIKE] 26th March: £31,229.68
    CC £0 :j WFTC £1660, SLC £6600, Car £18,654, Emergency Fund £1,000 :T
  • FireWyrm
    FireWyrm Posts: 6,557 Forumite
    Part of the Furniture Combo Breaker Debt-free and Proud!
    Trixxibell wrote: »
    Hi all,



    So it's better if I save then make a lump sum payment.

    If you are going down this line, be sure to put your money in a high (as much as possible at the moment) interest bearing account. You can have two accounts with TSB each paying 5% up to £2000 and if you are prepared to bunt money around, you can have one with Halifax too and pick up the £5 per month. Might as well make something out of the money while you are saving it.
    Debt Free! Long road, but we did it
    Meet my best friend : YNAB (you need a budget)
    My other best friend is a filofax.
    Do or do not, there is no try....Yoda.

    [/COLOR]
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