Cocker

iTrader: (3)

To buy my scoob i took out a personal loan of approx 50% of the purchase price. I currently have 17 months left to pay. I have enough money in my savings to pay it off early now, but when i confirmed the settlement figure with them, its only £100 less than what the actual balance is because i originally got the loan at a good rate.

The purpose of paying of loans early is to save the remaining interest but for £100 is it worth it? So my options are.....

- Carry on paying monthly and still have a healthy ISA balance
- Pay off loan and have the smugness of being debt free and save £200 per month on repayments, but put a 3k dent in my savings?

I really dont know which way to go. ESC advice pleeeeeeeeeeeeeeease!

Diesel_DC

iTrader: (7)

I would personally pay off the loan as the satisfaction of being debt free is great.

also gives you £200 a month towards mods

Milamber

iTrader: (2)

the interest you are paying on the loan will be greater than the interest you receive on your isa. For that reason pay off the loan and use the £200 to rebuild the isa.

53

iTrader: (41)

Depends really, is the loan protected ? will they refund the 17months of protection ?
If you only save £100, personally I would let it run. Security is paramount and even at 1% your ISA is paying nearly £50 so why reduce your economic flexibility for the sake of a tank of fuel ?

Cocker

iTrader: (3)

Nail on head Stu. Know my luck i would pay the loan of then next month my boiler would explode (or something that comes out of the blue which is going to cost me £££). After just shelling out nigh on 20k for my wedding in November, im thinking that i should try and build my saving back up anyway. If i was saving say £1,000 loan interest i would def do it but £100?

I would probably spunk the saved monthly repayment up the wall anyway instead of being sensible with it...

Loan protection - NEVER!

53

iTrader: (41)

Of course you would, it's the law

What interest do you get on the ISA ?

Cocker

iTrader: (3)

Cash ISA is 2.47%. Loan APR is 6%. Totally understand what Milamber is saying but it is the reduction in savings vs the fact i'm only saving £100 in loan interest arguement that im undecided on.

The other point is that if i pay the loan off early, when the time comes to buy a new car, im going to have to find more a month to pay for it (i'm not barry big bollocks who always pays CASH for their cars). If i go to the end of the loan i would of had the scoob 4 years so would possibly change it then anyway so i would only have to find my existing payment + new finance instead of it all in one go (i.e if the new finance was say £300 a month i would only have to find an extra £100)

I'm spending far too much time on RS246.com anyway as it is!

53

iTrader: (41)

Taking into account 'Use of funds' and the £100 saving by my calculations paying it off would save about £50.