This is my current loan.
- Loan Amount : £11,750
- Total Interest : £6,422.40
- Interest Rate : 21.2% per year
- Total : £18,172.40
- Pay per month : £306.19
- Term : 60 months (5 years)
I'm 2 years into the loan, I've made 24 payments of £306.19. I'm not facing redundancy(touch wood) or any other issues, but I really want to clean up on this loan as fast as possible so I can move on in life and look at other things such as a mortgage deposit or going to work abroad.
I called up the bank (Barclays if that makes any difference) and enquired about my loan (since I've had no correspondence from them in 18 months and don't know where I currently stand)
- Paid so far : £7348.56
- If I carry on as normal, current balance is : £11,117.84
- If I pay up early, as in next month, the total payable will be £8,789.90
Thats actually quite shocking, so I've pretty much spent 2 years just paying interest, and have only just got below the original amount borrowed, this has led me to think "right, what can I do about this?"
I've looked around, on MoneySupermarket.co.uk at personal loans, I've found a personal loan for the £8,789.90 from Nationwide, at 7.6% APR, Monthly payments would drop down to £271 and total repayable works out at £9,787
I don't have any savings, so its not like I can just clear it out now, but I'm thinking maybe I should take another loan, as the total repayable on a new one is considerably less than my current one.
I would take the new one for 3 years as that's what I have left on my existing one. My general idea is to get rid of it as quickly as possible so I don't want to start another 5 year loan.
What would you do? I'm a youngster and this is my first adventures in loans so I'm pretty hopeless at the moment!