Early Loan Repayments. Paying More Monthly

Southpaw18

Hi All,


I am two months away from debt freedom, after 6 years. And obviously I cant wait, however, someone took out the loan for me and I have been paying more than the original agreement.


I got £3000 and the loan total was 3241.20. the monthly payment under agreement was 24 payments of 135.05, however I paid the person who got the loan for me, £241.20 in the first month, now currently, only have 2 of the ten payments of £300 I made after. So I have 600 officially left to pay.


But if the person has actually been making payments of £300 per month on my behalf, then wouldn't the interest be considerably less, and mean I should actually pay less.


Can anyone do the maths on that? it was a 4% interest rate per annum, and 7.8% APR.


my debt freedom depends on your swift actions!


thanks

CHR15

Your loan has 600 left to pay.

what your friend did with his loan is his business. maybe he wanted to make a small profit after his crazy idea to take a loan for someone else.

Typhoon2000

Yes,if your friendwas overpaying he was losing interest/investment income he could have been making elsewhere with his money. So unless you want to compensate him for his lost earnings, just pay the last two payments as planned.

redpete

Southpaw18 wrote: »

But if the person has actually been making payments of £300 per month on my behalf, then wouldn't the interest be considerably less, and mean I should actually pay less.

Nope, they have been making the £300 payments on their behalf to pay off their loan. Your agreement was with the friend to pay them what you agreed - you should continue paying the amount you agreed.

ViolaLass

Why did you agree to pay extra at the time?