Paying off a longer term loan early

richje100

Hi,
This seems too easy and probably wont work but would love to hear some advice.

I'm looking to take out a personal loan with the bank and ideally would like it over 5yrs but my budget is £380p/m
£21k over 5yrs is £417, rate is 7.4% fixed.
£21k over 8yrs is £288, same rate 7.4%

Is there a way of working out how much I'd need to over pay each month so that I finish the 8yr loan in 5yrs?
I.e. £100 p/m equates to £6,000 I would have overpaid.

thank you

Nasqueron

MSE has one for mortgages, it might work for you:

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

Mark_d

If you want to repay £21k over 5 years then perhaps it's worth getting quotes from different banks

Isthisforreal99

You would also need to look at the loan T&C's to see what it says about overpayments and how they will be treated.

molerat

As above you need to read the T&Cs over additional payments.

The above rates are based on daily interest on the outstanding balance so to pay off the 8 year loan in 5 years you need to pay at the 5 year rate so an additional £417 - £288 = £129 pm. As you only have £92 pm spare that will pay the loan off in around 5y 8m