Tesco bank loan - best way to overpay?

Dalek01

Hi all,
I have a Tesco Bank loan (approx 3%) with just under 5 years to run, owing just under £10k which I would now like to start overpaying.  It was a front-loaded interest loan with just over £2000 added at the start in 2017 (£15k loan became £17000ish).
Do I get a better interest rate rebate by overpaying £2,400 in one lump sum, compared to repaying an extra £200 per month for the next year? I was just wondering which is the most moneysaving way to do it.
Thanks for any advice.

[Deleted User]

The loan doesn't have front loaded interest.

Interest accrues daily, so the earlier you pay, the lower the balance and the less interest you pay.

femalemonarchfemalecanine

the quicker you repay more of it the less interest you will pay, so paying £2400 now rather than £200 a month for 12 months will reduce the interest you pay

dano17439

100% pay the lump sum now!

Dalek01

Thanks for your advice. I'll transfer the money first thing tomorrow.

anto164

I have the same with my first direct loan. The balance only reduces by the amount paid, it doesnt recalculate the interest. You'd probably just see a difference if you phone them up to recalculate the remaining balance.

dano17439

I had a Tesco loan once and made lump sum overpayments. They reduce your balance by the amount paid plus the interest saved

DayDreamerandGeneralWaster

I spoke to first direct recently, they would refund the interest st the end of  the loan