Savings or Pay Loan

catapillar2018

Hi,  i'm looking for advice, if i'll be best using some of my deposit  savings (due to the low interest rates) to pay off my Halifax loan to save on paying 9.9% interest for the next 2year.  I'll not be applying for a mortage till around 8+months.

Deposit Savings £7000
Halifax personal loan (Car) - Orginal Loan-  orignally £5000,  £3250 remaining +9.9% interest  Ends:November 2022

DrEskimo

Pay off the loan.

catapillar2018

I've had the loan settlement quote- i would save £150 overall on interest (i may have got the interest rate wrong on my last post)
Would the right choice still be to pay this off now out of my house deposit? I pay £150 per month at the moment for the loan. 
Thanks. 

AntoMac

I would definitely repay the loan, then start rebuilding the savings with at least the monthly amount I was paying off the loan

[Deleted User]

Unless you're getting more than 10% on your savings, pay it off.

DrEskimo

catapillar2018 said:

I've had the loan settlement quote- i would save £150 overall on interest (i may have got the interest rate wrong on my last post)
Would the right choice still be to pay this off now out of my house deposit? I pay £150 per month at the moment for the loan. 
Thanks. 

If you didn't have the loan, would you happily write a cheque donating £150 to the finance company?

No I wouldn't either....I save my donations for charities...

Yes clear the loan and save £150.

catapillar2018

Thank you everyone - i will re pay the loan. Thinking i should have done this ages ago now but better now then never giving away £150. 

ThriftyMister

If you are saving into anything besides a "SAVE TO BUY" or "LISA" (Each of which pay 25% on top of what you put in), then you're better off financially clearing your loan. Having no monthly outgoings on loan payments will increase the maximum amount a mortgage lender will lend to you, also.

If, howevever, you're saving into a "Save to buy" or "LISA" account, you're better off financially continuing to do so any only putting anything above the maximum allowable amount (e.g. £4,000 per year for a LISA) into overpayments on your loan. 

Sandtree

If you lose your job tomorrow do you have enough other savings to continue paying your rent, bills etc for a reasonable number of months? If so then pay off the loan. If not then its more questionable