which loan should i pay a bit of money off from to save the most in interest

edgordon1982

Hi, i have 2 loans both with hitachi and both at 9.9% apr. I have £2000 in cash i can use to pay a chunk off 1 of them which would i be best to pay off?
loan 1 - 77 months left to pay at £66.01 per month (settlement today would cost £3835 and total left to pay if i keep going as is is £5083)
loan 2 - 96 months left to pay at £35.01 per month (settlement today would cost £2349 and total left to pay if i keep going as is is £3560)
which can i save the most by paying off £2000?
I guess i could find the extra £349 and save the entire interest cost of loan 2 (so saving £1211) but i cant work out what the maths is for the saving on loan 1!!

[Deleted User]

It makes no different in terms of interest.

However, for neatness, you may want to pay off the smaller loan which will give you more flexibility to overpay the other or not, depending on circumstances.

badmemory

You should check your t & cs for early payment penalties.  However if you pay off all of the smaller loan in full, you can then pay £100/month off the other loan & save interest on that too or save an emergency fund so you don't need loans again.  Or find that 0% interest loans are available to you.  It is amazing how much money at 0% people want to throw at you when you don't appear to need it!