AA Loans Partial Repayment Insanity

MEM62

Framer_Shane wrote: »

However, I've just been told that the repayment I plan on making will not be applied to my account straight away. Instead it will take 54 days, and in the meantime I will continue to pay my current repayment amount (almost £300) until 24th March.

This obviously doesn't help me as I need to be out by the end of this month.

Pay off a smaller lump sum and use what you have kept back for your deposit and first months rent. Simple.

Framer_Shane

Tarambor wrote: »

Sorry but that makes absolutely no sense whatsoever that to not pay off a lump sum and live on it instead would mean you were worse off. Other than a bit of additional interest it leaves you in exactly the same financial position in a few months.

You're still going to have those upfront costs to pay but you'll not have the money to do it because you've paid off a chunk of the loan.

Over the three month period you're still going to be paying out the same total amount of money, it'll just be going in different directions depending on whether you pay off the loan with it or live on it.

I plan on keeping some of the lump sum to cover costs, the rest will pay off a big chunk of the loan. I have to get the loan payments down as much as possible to be able to afford to move out based on my income and the cost to rent here in Essex.

Maybe that makes sense, maybe it doesn't. It's hard for me to explain, but based on the maths I've done, I have to get the loan down as much as possible period.
I have to be out by the end of this month, so to have to pay the full loan amount and rent and other costs/bills for 2-3 months just isn't doable.

ThePants999

It doesn't make sense to me - would love to see your workings.

Logically, the only difference between paying off more loan now and funding future costs from future income, vs paying off less loan now and funding future costs from the lump sum, is the interest you pay on what you would have paid off. Over a couple of months, that's surely not going to be significant enough to make the difference between "fine" and "would cripple you".