When paying off a loan early, do you pay the remaining principal or remaining principal + interest?

Aethelwulf

Doneby55 said:

Aethelwulf said:

Doneby55 said:

Others have answered your Q on interest, but just wanted to add - if you need the cash for something you can't buy on a credit card, is it worth a look at a money transfer card from the likes of MBNA? Often have 0% promotional rates (with a fee) but then you've got flexibility to overpay (but you MUST pay minimums on time to keep the 0%.
Apologies if you've already tried this, but I see MBNA do an online eligibility checker which is a soft search so doesn't affect credit record. Surely worth a go before a 20% loan...

I'd love a balance transfer card! But I'm not eligible for one. At least not for the amount I need. The purpose of me lending money is to pay off my student overdraft, pay other random debts and just all round get my finances organised and streamlined. It's just a shame I have to pay such a high interest rate to do so. But I'm trying to not look at in this way.. The amount I need to borrow and my situation is quite mild comapred to some, so I'm trying to be optimistic about it.

Fair enough - I wasn't clear from your first post you'd checked money transfer options, but sounds like you have. Presumably the overdraft will have a higher rate (or will do soon with the changes coming in), so agree - it's not a huge amount, so be optimistic and overpay as rapidly as you can to save interest. Good luck!

It does, but technially I'd be in my overdraft for less time than it would take to pay off my loan.. So it's cheaper. I need to have a good think about what I want to do, but whatever my choice optimism about it is key. Thanks for the advice sir!

Aethelwulf

Terry_Towelling said:

What is the interest rate on your student overdraft? - is it free?  What about these other 'random' debts you mention in passing? - what rates are you paying on these and what sort of debts are they?

If the overdraft is free, you'd be better off simply aiming to reduce it monthly by the same amount as you would be paying towards a loan.  If you think that would be difficult, then consider how you'd afford to make loan repayments.