HP Finance Paying early

kitkat10047

Im looking at buying a car for £3495. I can take a HP fiance with £250 upfront for £109.04 a month and over a 37 months term. There is a 19.2% APR with a total amount of £4294.48. If i paid 5 months of £109.04 how much would i probably have to pay to pay off the finance fully in the sixth month ?

BoGoF

Difficult to give an accurate figure without knowing date of loan and payment dates. But very roughly I calculate the balance after 5 payments to be around £2950. However you would need to read any loan agreement to ser if there are any early settlement penalties....2 months interest is common.

You are paying around £50 a month interest at the start......why take out finance for 5 months?

glennstar

Ask the HP company for a settlement figure, which is the only precise way to do this. The will include the capital owing, the interest and any termination fees if applicable. There is no issue with you asking them for this information, you are perfectly within your rights to have it.

System

With an APR of 19.2% it would be cheaper to do it on a credit card. If you can pay off fully in 5/6 months can't you wait that long to get one?