Avoiding the 58 Day Rule

BlueSocks10

I took out a £10,000 loan for 48 months from MBNA on 9 September 2024.

Current balance is £7,715

I pay £235 per month

Interest is 6.4%

If I clear the balance (from savings) I have to pay 58 days interest.

I can make as many overpayments as I wish.

If I overpaid say £7,500, would the balance be paid off after the next monthly payment without having to pay 58 days interest? Or are they wise to this manoeuvre?

QrizB

Do overpayments reduce the term, or do they reduce the monthly payments?

Edi81

MBNA loans are supplied by Lloyds Bank. 

I made overpayments to my Lloyds loan and let the direct debit pay the last payment. Worked for me with no charges. 

BlueSocks10

QrizB said:

Do overpayments reduce the term, or do they reduce the monthly payments?

I'm not sure, I think they reduce the term.

BlueSocks10

Edi81 said:

MBNA loans are supplied by Lloyds Bank. 

I made overpayments to my Lloyds loan and let the direct debit pay the last payment. Worked for me with no charges. 

Good to know, thanks.

BlueSocks10

Well I paid off £7000 yesterday.

I now have only three monthly payments left.

They said nothing about me haveing to pay 58 days interest after the debt is cleared for paying the loan off early.

So we shall see. I'll post back here in three months time with an update.