Savings calculator for paying off a loan?

GoToGal

Hi

I have an A&L loan which has 4 years to run. I have about £500 a month which I'm saving but want to work out when I'll have enough saved up to pay the loan off as the loan is reducing monthly as well

Ideally I'd like a spreadsheet or formulae so I can tweak the monthly savings and see when a "Clear That Loan" date is reached. I'm sure it's do-able but my mind's gone blank :-S

PS there is a early repayment charge of 1 months' interest.

Rafter

Not an easy thing to do simply.

For each month you need your opening balance, the amount of interest you are paying, your loan repayment and this will give you you opening balance for the next month, so 4 columns:

1st Column - starting balance of loan

2nd Column = 1st column x ((1+r%)^(1/12)-1 where R is the interest rate on your loan.

3rd column = monthly payment amount

4th column = col1+col2-col3

You should then find that the balance reduces as you go down the months of the loan until it is paid off.

You can then do the same thing for your savings, working out how much they are building up each month with the interest you are earning and the amount you are adding.

you should then be able to see when your savings are greater than your loan and, adjusting for the 1 month penalty you should be able to clear it.

R.

GoToGal

Ta muchly, will plug that into Excel and see how I get on

NikNak_3

Try this http://www.whatsthecost.com/snowball.aspx

It works out the date you'll finish paying the loan.