which results in lower interest regular over payments or lump overnpayments?

AdventureRocks

so out of regular over payments and lump one off payments yearly which would total the regular monthly result in lower interest ?

from my understanding if i did monthly regular overpayments it would result in lower interest as interest is calculated daily is this logic correct ?

thanks!

HappyMJ

You should make your monthly loan payment and your overpayment the day you are paid if you can foresee you do not need some of the money for the remainder of your pay period. That way you will have the lowest current account balance possible earning little to no interest and save as much as possible by having a lower loan balance on which interest is calculated.

Sometimes though you can earn more in interest than you are paying out so it may not be worth making any overpayments at all.

Thrugelmir

Interest is calculated daily and compounded monthly.

amnblog

The more regular the overpayment the less the total interest paid, assuming the same total overpayment. That is a mathematical fact.

This is for accounts where the overpayment is applied on receipt.