Loan Repayment

chelsea12184

I currently have a loan with 7k remaining to pay off.

The loan is at 19% interest, my monthly repayments are around £250

Yes I know this is bad......

I am going to be paying off £1000 a month, I'm just wondering the most effecient way to do this:

1. Get a new loan at 3.9% and spread it over x months
2. Save £1000 a month untill I have the remaining amount and then pay it off at once
3. Pay off the £1000 a month untill its done

Thanks,

Bepster

[Deleted User]

Interest is charged daily. So, subject to any overpayment charges, pay as much as you can, as soon as you can.

If you can get a lower rate loan, then that's an option. But with a current loan at 19%, a 3.9% loan is probably unlikely.

chelsea12184

I can get a loan at 3.9% no problem long story why I have the 19% loan but my credit score is perfect, if this is an option would it work out better to take a 3.9% loan and then repay as much as possible monthly?

Thanks,

Bepster

Pixie5740

Option 3 is the cheapest unless you are able to combine options 1 and 3.