Calculating settlement figure

Samsmith1212

Hi. I’ve took out a loan for £1300 using 118 money.
I got offered a rate of 103.3% which is very high because I have a poor credit score. The payments are £122.76 every month for 2 years. I’ve read on this website that for the first few months you’re not paying anything of the loan but the interest itself?
The plan was to clear the total loan for April/May 2018. I have spoken to 118 but they cannot give me a estimate on how much the settlement figure would be for April/May 2018.. They agreed the first few months i am just paying interest and barely anything towards the loan. Can someone very kindly help me out on how much the settlement figure would be?
I appreciate your help
Thank you!

System

Of course they can't because they don't know what payments you'll make.

To clear £1300 at 103.3% APR in 6 months you'd need to make monthly repayments of £286.62

So if we go on that you'd be repaying £1719 in total over 6 months compared to £2946 over 2 years saving you £1227, almost as much as you'd actually borrowed. I hope that puts into perspective just how bloody stupid it is borrowing at that interest rate.

Personally I'd do it that way, make overpayments every month to clear it by April/May. You will save more in interest than just paying £122 a month and making a lump sum payment in April.

This is of course assuming there are no penalties for overpayment and early settlement fees/charges. Check the terms of your loan to see what they are because there will most likely be an early settlement fee of X months interest.

And after you've done this and set the overpayments up then get on the Debt Free Wannabe board and sort out your finances so you can build up an emergency fund so you never have to borrow £1300 again.

cmc_entertainment

Tarambor wrote: »

[...]

Personally I'd do it that way, make overpayments every month to clear it by April/May. You will save more in interest than just paying £122 a month and making a lump sum payment in April.

This is, of course, assuming there are no penalties for overpayment and early settlement fees/charges. Check the terms of your loan to see what they are because there will most likely be an early settlement fee of X months interest.[...]

For the internet archive section.

Regardless of how much you overpay, 118 will still take 2 normal amounts scheduled payments from you BEFORE the payments are reduced. So if you multiple overpay, they will not take effect for 3 months.

Also, all loans over 12months are charged 58days interest.

Taking this into consideration, it may not be beneficial if you do pay off a major lump sum off and to take the 3 month rule into consideration as well