Advice on paying off loan

Mar_Graham

I am seeking advice as to whether or not pay extra towards a car finance loan I currently have.
I owe approx £6000 and pay around £249 per month with 28 months remaining (4.9%) I was thinking of paying £2000 lump sum towards it. Is this wise?

StopIt

If the option for overpayments is there, and it'll result in you paying less interest, yes, it is wise.

sourcrates

I would check the terms of your agreement first before i did anything.

Some companies charge for over-payments.

Integroo

When did you take out the loan? If it was after 1 February 2011 you can make overpayments without penalty in almost all situations (with only a few exceptions - you should still check the small print). A maximum of two months penalty interest can be charged if you settle the loan early in full. You can get round this by making an overpayment bringing the total remaining to a small amount and then settling that small amount at a later date (and you would pay two months interest on that small amount) or letting your direct debit make a final payment.

As to whether you should: if you have the money sitting around and you are not going to up against the wall making that payment, yes. You are unlikely to make more than 4.9% interest in a savings account.