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Paying off a C.U. Loan early - Interest?

  • 06-04-2010 4:27pm
    #1
    Trotter
    Closed Accounts Posts: 5,362 ✭✭✭


    Hi all,
    If I pay 2k in one go off a credit union loan, leaving the rest to be paid off with the usual repayments over a few years, should I be paying interest on the 2k? As in should the full 2k go off the amount owed or should some of it be taken in interest?

    I was hoping to pay a chunk off the loan to shorten the time I'll be paying it, and to lessen the interest I'd pay overall.
    Thanks!


Comments

  • #2
    suzieled
    Registered Users Posts: 41 ✭suzieled


    The good thing about CU loans are no fees if you pay off ealry and you should not have to pay interst on your €2000.
    To make sure check with your local CU. but I know at my local CU, you will have less interest to pay if you pay off your loan earlier.


  • #3
    chris85
    Registered Users, Registered Users 2 Posts: 4,502 ✭✭✭chris85


    suzieled wrote: »
    The good thing about CU loans are no fees if you pay off ealry and you should not have to pay interst on your €2000.
    To make sure check with your local CU. but I know at my local CU, you will have less interest to pay if you pay off your loan earlier.

    +1

    In my CU its same thing i can pay lump sums with no penalty and just means have less interest to pay.


  • #4
    romah
    Closed Accounts Posts: 150 ✭✭romah


    In general...
    ... interest on your loan in the credit union is calculated on the outstanding balance only ...as your loan is paid back you will see the interest payment reduce as the loan reduces.

    Also one of the other advantages is that the interest rate is fixed rather than variable ..so repayments wont be increased


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