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  1. #1

    Loans - Partial Early Repayment

    After some advice... if I took out a loan for say 12k over 60 months, and within a few months, paid off the majority, leaving me with say a 2k balance, what would the impact be on my repayments?

    Would the remaining c.2k then be spread over the remaining term of the loan, (preferable), or would the fixed monthly payments that were initially set up on taking out the loan remain, and the residual balance would simply be paid off quicker, (i.e. term reduce).

    Scenario being: need to buy new car. Current car worth 10k, new car worth 12k. Can't be without car, so need to buy new one before getting rid of old one. Therefore cash tied up in current car. So proposed to buy new one on loan, then repay majority as soon as old car sold. Paying off the remaining balance over a fixed term.

    This would give me the liquidity I need, and also potentially tie me into a lower APR by taking out a larger initial amount.

    Interested in thoughts / advice?

  2. #2
    In most cases, the payments will remain the same.

    There's one or two lenders will reduce the payments.

  3. #3
    A long overdue welcome is needed.

    What does your agreement say ?

    I would imagine the term would stay the same and payments woukd reduce.

    Whats wrong with the current car ?

  4. #4
    No agreement. This is all just hypothetical. Bit of research before deciding on course of action.

    Current car = 2 seater. Need larger.

  5. #5
    I used zopa for my car loan.
    Spent a bit less than I thought and repaid the remaining cash back onto the loan. My term hasn't changed but the monthly payments have.


 

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