Pre-paying loan payments for a year..

laraapril

Hello

I have a bank loan for a term of 6 years.

I'm about to come into some money (not enough to pay it off, unfortunately!) - enough to cover one year's payments.

I was wondering if if I could pre-pay the next 12 months loan payments, suspend loan Direct Debit payments for the next 12 months too, and then re-commence the normal arrangement by DD thereafter.

I've heard of people paying of loans early, but this is rather different, nor is it like a payment holiday, because there wouldn't be any gap in payments (in fact, the bank would get 1 year of them early!). I wasn't sure if anyone else had ever come across this.

spadoosh

Its an awkward way of going about it and youd need to get agreement from the lender.

Why not just keep the money in the bank and let the DD proceed as normal?

laraapril

Well, it may affect benefits I am receiving.

[Deleted User]

No, the lender won't allow it.

laraapril

OK, thought it was probably a long shot, but heh!

Nothing ventured

spadoosh

laraapril wrote: »

Well, it may affect benefits I am receiving.

So you want to fiddle your finances so you can claim additional benefits of which you wouldnt be recieving otherwise?

And you want me as a tax payer to tell you how to do that?

Not very bright are you?

copperclock

You could take out a smaller loan, and use that plus your lump of cash to pay off the original. Then you would be left with a smaller loan and no (less) savings.

marliepanda

copperclock wrote: »

You could take out a smaller loan, and use that plus your lump of cash to pay off the original. Then you would be left with a smaller loan and no (less) savings.

Paying off debts like this could also affect the OP's benefits.

Sncjw

How have you got a loan on benefits thought it’s difficult to do so