?Pay off loan v's keep in savings

Aanon

Hi 

I would love some advice please - I have an outstanding loan with Lloyds (originally £5000) there is still 18 months outstanding on the loan with £177.18 repayments monthly. Lloyds have advised the settlement amount is £3980.87. I currently have £6700 saved (in a normal non savings account). Should I pay off my loan before moving the remainder of my savings to a savings account or move all the £6700 all into a savings account and continue to pay back the Lloyds loan monthly? 

Thanks in advance for your advice!
A

[Deleted User]

Pay it off unless your savings are attracting a higher interest rate than the debt.

foxy-stoat

What is the interest rate on the loan?

chelseablue

I'd pay it off 

Aanon

foxy-stoat said:

What is the interest rate on the loan? 

The interest rate is 4.79%

DrEskimo

Pay off the loan. The best rate you can currently get for a straight forward savings account is the Marcus Online at 1.35%? So by paying off the loan early you are effectively getting a net gain of 3.44% on your money.

foxy-stoat

Not a bad rate for a loan and if you find yourself wanting another loan in the future you may get offered a higher rate. 

You will save some money if you settle it with savings, not a lot.

On_my_way

Look up Dave Ramsey on you tube.

Keep £1000 in emergency fund, use the rest of your savings to get rid of the debt. Look at your spending and work out where you can cut back a bit so that you can save that money again.

JimmyTheWig

Aanon said:

there is still 18 months outstanding on the loan with £177.18 repayments monthly. Lloyds have advised the settlement amount is £3980.87.

If this is correct then don't pay it off as the total repayments left would be £3189.24.

[Deleted User]

Pay off the loan, interest rates have just been cut to 0.25% and most savings accounts will be attracting little if any interest for some time to come.

touch1337

Looks like the early repayment charge is going to come to around £800.
I wouldn't pay it off - thats a lot more than you'd save by paying it.

edit: Your figures can't be right? With 18 payments of £117.18 left at 4.79 %, your balance must be around £3100. The settlement figure can't be £3980, can it?