Closing loan account

pamweld

Hi I have a loan with AIB bank that is very high interest due to me not being able to afford the proper repayments so now the loan that was meant to be 5 years is approx 15 years long so even though I pay €170 pm it doesn't seem to reduce much each year! The current balance is just under €9000.
I have recently been awarded a small sum of money from an accident I was victim to a few years ago so want to use the money wisely and take full advantage of it!
I have been told that if I were to contact the bank and offer a smaller amount of money to close my loan account they might actually accept it, ie €7500 to clear the loan and keep a good credit rating. I'm sure I have paid more interest now on the loan than they ever expected to get so wondering if this might be actually possible.
Have heard some people do this with mortgages but not personal loans. Don't want to try this and end up feeling stupid but then if this is possible it would make my life alot easier to clear this loan as I am not working at present so would free up €170 a month

pamweld

just bumping this up again to see if any response

BuffyBot

The only people who can tell you for sure are AIB. However, I'd find it unlikely.

Jim2007

pamweld wrote: »

just bumping this up again to see if any response

Well the obvious question is what is in it for them? What makes it worth their while? At the moment I can't see any benefit for them, so why should they agree to it?

Savman

If you pay 7.5k off the balance, with the monthly repayments you would have it cleared in less than a year.

Rebel1977

If its variable lodge in some of your money and talk to them about a structure

Islander13

pamweld wrote: »

Hi I have a loan with AIB bank that is very high interest due to me not being able to afford the proper repayments so now the loan that was meant to be 5 years is approx 15 years long so even though I pay €170 pm it doesn't seem to reduce much each year! The current balance is just under €9000.
I have recently been awarded a small sum of money from an accident I was victim to a few years ago so want to use the money wisely and take full advantage of it!
I have been told that if I were to contact the bank and offer a smaller amount of money to close my loan account they might actually accept it, ie €7500 to clear the loan and keep a good credit rating. I'm sure I have paid more interest now on the loan than they ever expected to get so wondering if this might be actually possible.
Have heard some people do this with mortgages but not personal loans. Don't want to try this and end up feeling stupid but then if this is possible it would make my life alot easier to clear this loan as I am not working at present so would free up €170 a month

Unlikely they would do a deal as they only do deals with people who do not have capacity to repay. You clearly have capacity, hence no deal

Ideo

Savman wrote: »

If you pay 7.5k off the balance, with the monthly repayments you would have it cleared in less than a year.

I don't think the OP wants to pay off the remaining 1.5k, from my reading he wants some sort of discount for paying it off in one go on the basis that he has paid lots of interest already. TBH I cant see the bank going for this, as they are obv making money from the loan in terms of interest and it makes business sense to them. Also you can afford the repayments, even of the capacity is reduced and it's over a longer term and they are likely to spot this. I'd pay off the loan and chalk it down as a lesson learned, only borrow what u can afford

leeroybrown

OP, you're extremely unlikely to get a discount on the loan. A bank might discount a €300k distressed mortgage to get a repayment but they're not going to do it for a €9k personal loan. If you're paying almost entirely interest then you're pissing away most of your €170 pm just to stay in debt. If you use the €7.5k to reduce the term of the loan and keep paying the €170 pm most of your repayment will be principle and the loan will be gone in around a year.

Geri Male

They might accept 7,500 but it will show on the ICB that a settlement was made. Not a wise move.