Paying off loan early - advice please

Stella1971

mister_bojangles wrote: »

DiscoDuck, one trick that I use is to pay a lump sum, rather than seek to clear the debt. So if the balance is £1250, I pay up £1000. That way, the interest on the balance is less. When the payment is credited, call them to seek to know your balance. It works out cheaper.

Are you allowed to do this? I thought it was all or nothing?

CLAPTON

Stella1971 wrote: »

Thanks again.

I took the loan out Dec 16th 06, but they didn't take out the first payment until Feb 15th 07, could this make any difference, or is it worth calling them
again?

well, yes it does matter because they charge interest on a daily basis, so from the 16th dec to 15th feb interest was accrueing even though you made no payment, so that will certainly account for some of the 'extra' settlement figure

mister_bojangles

Quote:
Originally Posted by mister bojangles
DiscoDuck, one trick that I use is to pay a lump sum, rather than seek to clear the debt. So if the balance is £1250, I pay up £1000. That way, the interest on the balance is less. When the payment is credited, call them to seek to know your balance. It works out cheaper.

Are you allowed to do this? I thought it was all or nothing?

Stella1971,
when you have access to your account via a computer, you can do anything. Have you ever heard of creditors refusing money? This is why it's important to read up on penalties for early repayment BEFORE signing up.

My suggestion was to those who will not incur penalties for early payment. To make the amount you repay less than the company quotes you, reduce the balance voluntarily.