i have a loan with this outstanding.i have also saved £5000.should i pay the loan off?and leave me an extra £145 a month better off or keep paying £145 a month and keep my £5000 in the bank?
2007-11-28 06:35:19 · 11 answers · asked by max w 3 in Business & Finance ➔ Personal Finance
Pay off the debt,you're paying more interest on the loan then you will get if you leave the money in the bank.
2007-11-28 06:41:05 · answer #1 · answered by seaview 6 · 0⤊ 0⤋
This really depends on the loan. If you pay it off now will you be paying less than you would have done if you leave it to run. This really depends on how interest was calculated.
If interest is being charged on the loan then the chances are that interest is greater than the amount of interest you would earn from the equivalent money in a bank so financially you would be better off paying the load off and if you wish to pay the £145 into the bank account.
2007-11-28 14:43:22 · answer #2 · answered by peter 3 · 0⤊ 0⤋
Pay it off. The £145 per month you are paying will include interest as well as the loan amount. If you pay it off in full, the settlement figure may be less than the £5000.
2007-11-28 14:54:31 · answer #3 · answered by Faithless 3 · 0⤊ 0⤋
pay it off, then you don't have the worry of it hanging over you. Take the extra £145 and deposit that in the bank until your £5000 is built back up.
2007-11-28 14:42:10 · answer #4 · answered by Invisigoth 7 · 0⤊ 0⤋
Pay it off and put the 145 back into your savings where it can earn interest, instead of giving the money to a bank for the privilege of using it. You're life will be better when you are no longer slave to the lender.
2007-11-28 14:43:40 · answer #5 · answered by julie m 3 · 0⤊ 0⤋
What interest rate are they charging on the loan? If it's more than you're getting on the money in the bank, (which is almost certain) pay off the loan!
2007-11-28 14:43:30 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Depends on the interest rate on the loan- if it's more than the interest on your savings pay it off.
I assume your £5000 is safely tucked away in an ISA.
2007-11-29 10:52:10 · answer #7 · answered by Anonymous · 0⤊ 0⤋
pay it off, the loan would have a higher interest rate (Probably 12% +) than the interest that you would get in a savings account (ING 5.4%)
Pay it off and save £75 a month into a high interest account, you would be a lot better off then.
Use your savings in a few years for a deposit for a flat/house/car
2007-11-28 14:47:10 · answer #8 · answered by Rich S 5 · 0⤊ 0⤋
If by paying off your loan you will save on the interest due, do it. Otherwise there is not much to be gained except cash flow.
2007-11-28 14:43:50 · answer #9 · answered by Duffer 6 · 0⤊ 0⤋
Pay it off, if i had the money in my bank worth my debt i would pay it back, it will be a huge weight off your mind!
2007-11-28 14:43:32 · answer #10 · answered by catx_pye 3 · 0⤊ 0⤋