Quick Loan Advice

Leedsmedic

Hello, if some one could clarify something for me I would be very grateful.

I am about to take a loan out with M&S. The loan is over 24 months, and there is a very good chance I will be able to overpay on it. I presume that this will reduce the overall interest I pay, however some of the wording in the loan document have made me question this.

The loan is £8000 to repay over 2 years at 3.6%. The document states the "Total Amount Payable under this agreement" is £8298, and that "At the beginning of the loan agreement we work out the interest you will pay over the whole agreement and add this to your loan balance".

Does this mean that even if I overpay it will just reduce the time I am paying the loan rather than amount of interest, or should it still function as I had previously expected?

[Deleted User]

It will reduce the time and the interest you pay.

kensiko

Assuming you can overpay? Might be best to double check as some loans may only allow a final lump sum overpayment and not ones throughout the payback schedule.

Leedsmedic

Thanks, that what I though but just wanted to make sure before I went through with it.

(I am able to make overpayments which don't settle the account)