Need some information re: Halifax clarity loan

MediaGuy

Hi Everyone,

I am hoping someone can help. I have been accepted for a Halifax Clarity loan for a new car. I have done my sums, based on worst case scenarios and excluding all my overtime and additional sources of income.

I *HATE* taking on debt, so I am going to be looking to pay it back as quick as possible. I do have a question I can't seem to find the answer to..

If I overpay does the repayment amount decrease or does the pay back period shorten. Not that it matters either way, but just for my own knowledge.

PeacefulWaters

From their web site:

You can repay any amount off your loan at any time during the repayment period and we'll recalculate your balance and term

Neo08

I was wondering the same thing.

For example, I probably need to borrow about £4000, but if I was to get a loan for £7000 (to take advantage of the lower APR) then repay £3000, would my repayments come down, or stay the same but the loan term decreases, or both?

Ideally I would prefer the term to remain the same and my repayments to come down. If the repayments stay the same, I may aswell put it the excess amount into a high interest account/ISA and drip feed the money into my current account when the next payment is due.

The website is a bit vague in that area I think

Cash_Flow

MediaGuy wrote: »

Hi Everyone,

I am hoping someone can help. I have been accepted for a Halifax Clarity loan for a new car. I have done my sums, based on worst case scenarios and excluding all my overtime and additional sources of income.

I *HATE* taking on debt, so I am going to be looking to pay it back as quick as possible. I do have a question I can't seem to find the answer to..

If I overpay does the repayment amount decrease or does the pay back period shorten. Not that it matters either way, but just for my own knowledge.

The payment amount will remain the same, but the amount of payments left will be reduced.

Neo08

thanks, that makes it a lot more clearer!

Simon7685

You will also save on the overall interest paid on the loan and depending on the amount of your extra payment, it can be a real surprise when it tells you how much interest overall you save over the duration of the loan.

kuohu

Neo08 wrote: »

The website is a bit vague in that area I think

One might say, there is a lack of Clarity.