Borrowed 12,000 from Marks & Spencers in March 2001 at APR 11.5% for 84 months. Any way of finding out how much it would cost me now to pay it off or am I best to keep the loan going for the full 84 months?
So you're paying £205.06 per month, right? Assuming there would be 32 payments left, I reckon you'd owe about £5670, if you've just made the 33rd last payment.
So you'd save yourself about £890 by paying it off now, as against 32 x £205.06.
That's assuming they operate on a proper decreasing balance basis, and don't impose an admin charge for early repayment.
Alternatively, the might operate on a linear decay basis, with the interest apportioned by the Rule of 78 (or in this case of 3570). The original total charge for interest would be some £5225, and you'd have 528/3570 of it still to pay, which you would save, i.e. some £773. You would need to repay £12000+£5225-£773-52x£205.06, which is £5789 (plus any charges).
Rubbish. Common sense would tell you to compare the interest being charged on the loan, to the interest you could gain elsewhere (eg in a savings a/c). ONLY pay it off early IF the loan rate exceeds the available savings rate (which, at 11.5% APR loan rate here, probably does apply!).
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