Pay loan off in full

Tobina60

I have the funds to repay a bank loan in full but if I do its approx £300 on the current loan amount. If I pay the loan off minus approx one payment amount the term reduces to one month meaning the next monthly  payment will clear the loan meaning I only pay one month interest on top of the current amount. I.e approx £100. Why would / should I pay the loan clearance amount?

MorningcoffeeIV

If they don't charge early settlement on part-payments then do that, and let your normal payment clear it. 

If they do, then it's cheaper to pay the loan clearance amount.

Tobina60

Thanks MorningCoffeeIV I have done this on previous loans and never been charged extra received notifications to say I haven't paid the loan off in full but ignored them then the monthy payment was taken and nothing else and no communication. Just felt like I was fiddling someone somewhere

FashionHeart

Tobina60 said:

I have the funds to repay a bank loan in full but if I do its approx £300 on the current loan amount. If I pay the loan off minus approx one payment amount the term reduces to one month meaning the next monthly  payment will clear the loan meaning I only pay one month interest on top of the current amount. I.e approx £100. Why would / should I pay the loan clearance amount?

If you pay the early settlement, it does work out cheaper as you reduce the interest rate you would be paying off than if you didn't.
I've done this on numerous loans that I had paid off without repaying the full loan amount.