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loan
Have a loan AA for 5000 pounds plus interest of 486.04 total 5486.04 still owe 2895.41
Asked for settlement figure 2780.35 so rebate of 115.06 interest dose not seam a lot they said there was a delay of 58 days interest
I can also make a payment to reduce the team time, but does not say if they is the 58 days delay should I just put the money in savings as then will have 58 more days interest
Comments
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Whether you put the money into savings or not is down to how much interest the loan charges versus how much interest you get from the savings. My guess is that the loan charges more so if that's the case the more money you can dump on it the better - assuming there are no early payment fees.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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Brie said:assuming there are no early payment fees.I'd hazard a guess there are early settlement fees especially since the OP makes reference to "58 days interest". Any lender is legally allowed to charge an early settlement fee of up to 2 months of interest (1 month if there's less than 12 months remaining on the term). Added to the fact that in the early stages of any loan, most of the monthly payments go towards interest and relatively little eats away at the principle (which is not, as some people think, front-loading).OP, the advice from the previous poster is correct - unless the interest rate on your savings is higher than what you're being charged on the loan (which is probably very unlikely), then the sooner you pay off the loan the more you'll save.
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