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Pay off loan with savings

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  • 26-01-2012 9:22pm
    #1
    Keano
    Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators, Sports Moderators Posts: 12,803 Mod ✭✭✭✭


    Anyone done something similar?

    I'm tied into a loan for another 2.5 years but I'm in a position to be able to pay it off. It will obviously take sometime to get my savings up to the level again but with this out the way I can increase the amount I'm already saving. Are my looking at this too simple???


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    #2
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    This is money management 101. Use lower interest bearing savings to pay off higher interest loans


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    #3
    syklops
    Closed Accounts Posts: 18,966 ✭✭✭✭syklops


    Most banks have a penalty they apply for paying the loan off early. Find out what the penalty is and include it in your calculations.


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    #4
    dotsman
    Registered Users Posts: 3,635 ✭✭✭dotsman


    syklops wrote: »
    Most banks have a penalty they apply for paying the loan off early. Find out what the penalty is and include it in your calculations.

    Very few banks do. The only time a bank should charge a penalty is if it is a fixed rate loan. Most personal loans are variable rate.


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    #5
    syklops
    Closed Accounts Posts: 18,966 ✭✭✭✭syklops


    dotsman wrote: »
    Very few banks do. The only time a bank should charge a penalty is if it is a fixed rate loan. Most personal loans are variable rate.

    Fair enough.

    Mine does, this is why I said it, so OP, check first is all I am saying.


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