MiZz RuBy
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make over payments as the next months interest is calculated on the remaining balance!
but i hate loans so i would say clear it off!!! |
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bdgizzy
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It's better too pay alittle more because they add it too your principle balance, that way u pay it off sooner. |
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easy tigerâ„¢
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Make as large a payment as soon as you can to cut down on the interest they charge. If you save the extra to settle early they are tacking interest on the balance. |
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gingajen
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Alot of companies don't let you over pay each month. Howver, you may have to pay an early resettlement fee if you pay it off early, so look into tis before you take out a loan because some companies don't charge a resettlement fee. |
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Mike E
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over payments are great, that will reflect on your credit history and raise your credit score. Once you pay off the loan (one lump sum) your credit history will be Excellent.
I always pay over the amount required, then pay the bill off months later. Beware though... Doing this will bring a lot of other credit card companys wanting you to take there card (in your mail box) Just Tear them up, and trash them. |
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Paula R
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Bear in mind that a lot of companies charge you a fee for early completion. Find out if they do and what it is first. |
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Roger C
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If you can earn enough on the cash then you keep it and put it to work. For example if your mortgage is 5.5% and you can earn 8% on your money (say 6% net of taxes) then why pay early? Look at fees or penalties that may apply if you pay early in making this comparison.
There are several reasons not to pay early. You do not have an emergency fund set up and need one. You can make more on your money than the interest you are paying. You need the cash in the near future (ie a down payment on a car) and it will save you high interest rates. You have CC debt that needs to be paid....
Do you have CC debt? Paying that gives you an immediate return (interest saved) that exceeds your mortgage interest savings. Does your company have a 401k with 50% matching? If you are not at least contributing enough to get the match that is an immediate 50% return on your money. What is better these returns or paying early on your mortgage?
No easy answer, but some points for you to consider. |
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burning brightly
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Its better to make over payments than having to pay a penalty for completing the loan early |
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nicemanvery
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It depends on the terms of the loan , watch out for early settlement clauses !! |
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Darth Vader
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Normally overpayments is cheaper.
The only exception is that if you have invested the money into something that is paying a higher rate than the loan, after taxes that is. |
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My name's MUD
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Over payments are fine as long as the product accepts them, it is better to save a little and end the product a few months early if possible. However this may incur an early repayment penalty. You need to read the small print for the product. |
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Stephen
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It's wisest to pay that loan off as quickly as possible. I encourage everyone to think of a loan as a form of investment. If it's not making you money, would u have it ? Do you really NEED that loan ?
One man pretends to be rich, yet has nothing; another pretends
to be poor, yet has great wealth.
Proverbs 13:7, New International Version |
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