Loan

[oldtimer]

I can do maths sums, i have a A level in maths.. And a A in GCSE maths

My issue is working out how loans work, ive never done them before so no idea but apparently you pay the interest first.. So its better to pay it off monthly with £100 for opening account than paying off at once and having settlement figure.

Having a A level does not mean squat let me explain I read a Sunday newspaper and got to the Money section and they were interviewing a couple who had a £150k mortgage £20K car loan and £40k on credit cards and she was a financial officer of a company so its not about maths it is all about shopping around so you need £6k and you want to pay it over 4-5 year well find out how much you pay a month then get the total sum for that period and yes I know you want to work out what you are paying interest wise but just like gas and electric tariffs the banks jobs is to loan you money that you think is a good deal when its not so the best way is get quotes and see what it costs you in total and dont fall for the old trick of why pay £150a month for 3 years when you can pay £120 over 5 looks good until you see the final bill

 

[jaymd]

The way most loans work is that they will simply add 1months interest to your settlement figure. This would work out a lot cheaper for you to pay it off,because if you just keep on paying your loan as normal you are paying interest on all that your owe for the rest of the term, so you are incurring interest for the remaining term.

 

[oldtimer]

The way most loans work is that they will simply add 1months interest to your settlement figure. This would work out a lot cheaper for you to pay it off,because if you just keep on paying your loan as normal you are paying interest on all that your owe for the rest of the term, so you are incurring interest for the remaining term.

If its a personal loan or part of a set period then it makes no difference if you pay it of early as the bank will just get all their money earlier because thats the contract you sign I think the term is heads you lose and tails you lose

 

[axel132132]

Yeh, my mum worked it out and ive already paid all the interest on the loan what happened is i borrowed 7500 and my loan amount was 9000 ish.. So ive been paying it off and ive got a settlement figure of 4662 or what ever. So ive already paid about 4338

So what im trying to say is if i carry on paying the Direct Debit its irrelevant of interest or not as its already added to my figure

I think this is right

THen that way i will save 30 days interest by just paying the direct debits of?

Its a personal loan

Cheers

 

[oldtimer]

well raise a glass to mum lol

 

[Spudnik]

Not sure if this has been mentioned as I haven't read all the replies, however if it's a loan where you can overpay on occasion do this is 2 chunks.

Eg if the loan is £4500, then pay off £4000, then in a couple of months, pay off the remainder.

They then only charge interest on what is owing on the final amount.


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[axel132132]

Ahhh thats a good idea if thats how it works cheers Jason ill give them a ring monday see what they say about how the interest works when paying off nice one ta

 

[Paul.M]

Best to ask the experts on this matter:- Money Saving Expert: Credit Cards, Shopping, Bank Charges, Cheap Flights and more

Use their forum to get advice but I guess they will tell you that it will save you a whole lot more money if you pay the settlement figure now regardless of the £100 sign up bonus + interest on that savings account. Your APR % on the loan will be 2-5 times higher than the savings account APR %.