Interest help

oaktree500

Hi,

Really sorry to be "dense" here, although I'm having trouble understanding how the interest is working on my loan. And I'm after advice on how to pay quicker / potentially pay less interest if that is possible?

I took out the loan as it was the only one I could get at the time, and it was to consolidate various debts I had last year. I have a 2K coming in next month which I can mostly put down on it (at least 1.5K of it) so I was wondering if there where any other tips to pay off sooner/gather less interest.

Loan is from Lendable if that makes a difference. My current plan is/was to pay this until my credit score is better, then switch to a lower interest loan/

Details below:
£5200
Taken out 13/08/2018
48 months
£209.79 a month
Total repayable: £9,864.77 [I presume with all interest payed as expected?]
Current total to pay: 4911.22 [to pay in full as of today]

Interest
Fixed rate of 38.39% per year
The APR is 44.3%.

foxy-stoat

Just call them up when your ready and make an over-payment - they may make a charge of 58 days interest but you will save money on the interest, but as bad as some but still not good.

Keep the remaining payments the same so you just shorten the loan length.

Your first month payment would of only paid £17.50 ish off what you borrowed...yuk!

foxy-stoat

Buy you already knew that as this is a similar thread to your previous one.

https://forums.moneysavingexpert.com/discussion/5948279

oaktree500

Yes, it was a bit of a "lesser of two evils" thing for me. This was a good way to actually reduce what I was paying out, and manage my debts more effectively. Only issue now is that I'm stuck with this high interest rate.

I've seen from the break down they provide that the interest will go down eventually, with the payments paying more of the actual loan off, but am painfully aware I'm not paying all that much off of the actual amount at the moment.

foxy-stoat

oaktree500 wrote: »

Yes, it was a bit of a "lesser of two evils" thing for me. This was a good way to actually reduce what I was paying out, and manage my debts more effectively. Only issue now is that I'm stuck with this high interest rate.

I've seen from the break down they provide that the interest will go down eventually, with the payments paying more of the actual loan off, but am painfully aware I'm not paying all that much off of the actual amount at the moment.

This is probably because you were paying a lot more off each month before you took out this loan. What you should of done, and still can, is to overpay this loan every month as you will be paying nothing but interest pretty much for the first couple of years. Dropping all of the £2000 into this loan will reduce your term by years.

oaktree500

Buy you already knew that as this is a similar thread to your previous one.

https://forums.moneysavingexpert.com/discussion/5948279

Yes I posted this before, but I can't get any decent cards that offer the 0% interest which was the main advice previuously. This was more a "how to pay off earlier/less interest" thread.

Sorry, debts are plaguing my mind, and I'm forever forgetting what I've asked/what's going on, as I simply don't understand a lot of the interest related stuff.

oaktree500

foxy-stoat wrote: »

This is probably because you were paying a lot more off each month before you took out this loan. What you should of done, and still can, is to overpay this loan every month as you will be paying nothing but interest pretty much for the first couple of years. Dropping all of the £2000 into this loan will reduce your term by years.

Ok that is reassuring. Again apologies for being a pain the bum and asking the same questions. It's just something weighing on my mind a whole lot.

Thank you again,