Paying off a personal loan early

L13OAY

Hi all.

So I have a personal loan with NatWest. I stupidly took it out a couple of years ago with a ridiculous APR of 22.9%

I'm wanting to pay it off early by means of increasing my monthly payments, but NatWest won't allow this. The T&C's state I would be chargeable a fee of 58 days interest for early settlement.
Is it cheaper save the total amount up and settle it off in one lump sum, or just let the payments be deducted until full term is up?

Sorry if this is a silly question. I have about 18 months left on it.

Thank you!

Pixie5740

What do you mean NatWest won't allow it? Do you mean that NatWest won't increase your monthly direct debit or that NatWest won't accept an overpayment full stop?

L13OAY

Sorry I didn't word that very well. They won't increase my monthly payment. They will allow overpayments but charge 58 days interest on each overpayment.

Herzlos

Then assuming you've still got more than 2 months to run, you're going to be cheaper making overpayments as/when you can.

At 22%, you're going to be better overpaying (and paying the 58 days interest) than sitting it in a savings account (@ about 1%) to clear in a lump (and still paying the 58 days).