Looking for ways pay off my loan faster?

SinisterDexter

I took out a personal loan with my bank (Barclays).


£5000 borrowed.
£7000 approximately on the repay inc interest.
APR unknown.
5 Years (Repayment period).
£128.08 monthly repayments on direct debit.


Can anybody on the forum have any ideas, tips or expertise on how I could eliminate this loan faster?


I skim read into ideas such as;


Loan switching with a lower interest loan
Cash transfer cash
even a DMP (Debt Management Plan)


None executed yet as I want to make an informed and careful decision.


Any advice would be most appreciated.

Apples2

You don't appear to know the APR you have now yet expect someone to suggest a cheaper loan?

With £7k owing on a £5k loan, you must have taken it today or shortly beforehand?

A DMP is for people who are unable to repay their loans so they pay less. The term extends by many many years, it doesn't shorten it.

Good luck finding a card which allows you to cash transfer £7k out straight away.

dealer_wins

Overpay each month, make lump sum payments?

CLAPTON

SinisterDexter wrote: »

I took out a personal loan with my bank (Barclays).


£5000 borrowed.
£7000 approximately on the repay inc interest.
APR unknown.
5 Years (Repayment period).
£128.08 monthly repayments on direct debit.


Can anybody on the forum have any ideas, tips or expertise on how I could eliminate this loan faster?


I skim read into ideas such as;


Loan switching with a lower interest loan
Cash transfer cash
even a DMP (Debt Management Plan)


None executed yet as I want to make an informed and careful decision.


Any advice would be most appreciated.

128.06 x 60 = £7,683

this is about 20% APR


when did you take out the loan?

what's your salary?

what do your credit files say about you?

SinisterDexter

I apologise for not knowing the APR, I would usually have it to hand but I lost my wallet on the weekend, so I had to cancel my card thus I have no access to my online banking.


I borrowed the money November 2014. so yes, very recently.

Tixy

The options are to pay more a month or to try to refinance at a cheaper rate (or both).

If you are able to get accepted for a lower rate loan elsewhere then that may be worthwhile - remember to factor in the early settlement interest in to your calculations when working out how much you will save and don't extend the repayment period (if your existing loan has 56 repayments left then take the new one out over the same period - extending it back to a new 5year term from now could wipe out any interest savings).

That said if you could only get a 20% ish APR loan a few months ago then you may well struggle to get a much better rate today unless you have a significant change in circumstances or your credit file.

The other option is to make increased payments each month, which will reduce the overall amount of interest you pay. Check the T&Cs of your loan doesn't have any fees for partial overpayments (most don't).

pinkdalek

Overpay, it will reduce the term, but not your monthly payment, but do not stretch yourself, make sure you can pay the contracted payment each month as you would still be required to pay this irrespective of your overpayments.

Go back to the loan provider after the 1st year, see if they can offer you a loan on a cheaper rate. Paying your loan on time, not running up further debts elsewhere, will improve your credit rating, which may improve your rating with your own bank.

20aday

I've a loan with NatWest at 19% with another 30 months before it completes.

So to try and get the amount owed down faster I've made overpayments where I can.

Granted there's a Partial Payment Interest fee added to the amount outstanding each month but it's worth it to get shot of it quicker.

ViolaLass

20aday wrote: »

I've a loan with NatWest at 19% with another 30 months before it completes.

So to try and get the amount owed down faster I've made overpayments where I can.

Granted there's a Partial Payment Interest fee added to the amount outstanding each month but it's worth it to get shot of it quicker.

It would be worth working out whether you'd save money by saving up and overpaying less often (in larger amounts).

20aday

ViolaLass wrote: »

It would be worth working out whether you'd save money by saving up and overpaying less often (in larger amounts).

Once I've ditched my "filthy" habit (hence the username!) I aim to.

Just doing what I can (realistically) afford at the moment to make a slight difference.

Thanks though

ViolaLass

20aday, how much is the partial payment fee?