Early repayment of Natwest loan - save money?
Options
itisgeorge
Posts: 13 Forumite
in Loans
Hello,
I have a £4,000 loan with NatWest a few years ago (no date to hand), with a rate of 25.90% and a monthly repayment of £122.94. The interest seems to be charged monthly and the remaining loan balance is £3,325.60. Does this monthly interest all get added when you pay in a lump sum regardless?
I'm looking to potentially reduce this debt by early repayment by taking out a seperate low interest loan from Zopa for instance. I'm a bit confused if repaying early actually saves money, as the last early settlement figure I requested was higher than the balance shown on statements.
Will I actually be paying more than the balance shown on the statements if I continue to pay monthly?
I also understand that you incur a early settlement fee that I can avoid by not completely paying in full and leaving a months payment remaining to be collected normally.
Appreciate any help.
Cheers
I have a £4,000 loan with NatWest a few years ago (no date to hand), with a rate of 25.90% and a monthly repayment of £122.94. The interest seems to be charged monthly and the remaining loan balance is £3,325.60. Does this monthly interest all get added when you pay in a lump sum regardless?
I'm looking to potentially reduce this debt by early repayment by taking out a seperate low interest loan from Zopa for instance. I'm a bit confused if repaying early actually saves money, as the last early settlement figure I requested was higher than the balance shown on statements.
Will I actually be paying more than the balance shown on the statements if I continue to pay monthly?
I also understand that you incur a early settlement fee that I can avoid by not completely paying in full and leaving a months payment remaining to be collected normally.
Appreciate any help.
Cheers
0
Comments
-
The earlier you pay, the more interest you save, as interest is calculated daily and added monthly.0
-
perfect! So does the balance shown on say, online banking, include the interest? If not, does that mean the balance would technically increase if I continue paying monthly to include the interest?
Thank you!0 -
The balance shown does not include interest usually . The settlement amount will always be higher than the remaining shown on a statement
Request a settlement figure. That is the only way to get and up to date amount you need to pay to close the account.
However I would not be considering swapping one debt for another. You are not guaranteed you will get a low rate loan. How many months left of your existing loan? Is that your only debt?£2 Savers Club for 2022 #120
This discussion has been closed.
Categories
- All Categories
- 343.5K Banking & Borrowing
- 250.2K Reduce Debt & Boost Income
- 449.9K Spending & Discounts
- 235.6K Work, Benefits & Business
- 608.5K Mortgages, Homes & Bills
- 173.2K Life & Family
- 248.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards