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AIB - Paying a Loan back early?

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  • 02-01-2008 1:38pm
    #1
    firebug_guy
    Registered Users Posts: 119 ✭✭


    I have about a grand outstanding on my loan...

    I have the money (dont know how I didnt blow it all at Christmas), and was going to just put it off my loan. Can I do this? Or will I be penalised?


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    #2
    BuffyBot
    Registered Users Posts: 24,924 ✭✭✭✭BuffyBot


    It depends - generally if it is a fixed rate loan, you may have to pay a penalty for breaking the fixed payments/term. If it's a variable rate loan then generally you can pay back more whenever you feel like it. You'll need to confirm it with the branch that opened the loan for you just to be sure


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    #3
    zzzzzzzz
    Registered Users Posts: 1,431 ✭✭✭zzzzzzzz


    Stupid question: If you pay back a variable rate loan early, you pay less interest than if you let the loan run full-term, right?


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    #4
    axer
    Registered Users Posts: 5,517 ✭✭✭axer


    aidan.offbeat wrote: »
    Stupid question: If you pay back a variable rate loan early, you pay less interest than if you let the loan run full-term, right?
    I pay less by paying back early with the bank of ireland anyway. Just ask your bank.


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    #5
    unclebill98
    Registered Users Posts: 3,816 ✭✭✭unclebill98


    aidan.offbeat wrote: »
    Stupid question: If you pay back a variable rate loan early, you pay less interest than if you let the loan run full-term, right?

    Yes.


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    #6
    jjbrien
    Registered Users Posts: 2,678 ✭✭✭jjbrien


    I paid a personal loan back with AIB ahead of schedule. I saved myself I tun of interest and did not have to pay a penalty.


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    #7
    BiddyBop
    Registered Users Posts: 15 ✭BiddyBop


    Banks are not allowed to impose penalty charges on paying back a variable rate loan early, they can impose a penalty on paying back a fixed rate loan early, though not all banks do so, you would need to check out the terms and conditions of your loan. If you pay off a loan early you would essentially be paying less interest in the long run as the interest is charged on your balance usually every quarter.


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    #8
    zzzzzzzz
    Registered Users Posts: 1,431 ✭✭✭zzzzzzzz


    BiddyBop wrote: »
    Banks are not allowed to impose penalty charges on paying back a variable rate loan early, they can impose a penalty on paying back a fixed rate loan early, though not all banks do so, you would need to check out the terms and conditions of your loan. If you pay off a loan early you would essentially be paying less interest in the long run as the interest is charged on your balance usually every quarter.

    So paying back a variable rate loan 2 weeks after getting it, you would pay next to nothing in interest? Or is there a minimum amount of interest charged?


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    #9
    Blush_01
    Registered Users Posts: 5,016 ✭✭✭Blush_01


    I have a fixed rate loan with AIB, but I checked when I was getting the loan to ensure that I wouldn't pay any penalties if I paid any back early. I know in the Credit Union I'm with you can pay it all off as quickly as possible, if you have the means.


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    #10
    axer
    Registered Users Posts: 5,517 ✭✭✭axer


    I paid back a €1,000 loan from boi after about 2-3 months. Only paid €15 interest instead of ~€80.


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    #11
    dotsman
    Registered Users Posts: 3,636 ✭✭✭dotsman


    Blush_01 wrote: »
    I have a fixed rate loan with AIB, but I checked when I was getting the loan to ensure that I wouldn't pay any penalties if I paid any back early. I know in the Credit Union I'm with you can pay it all off as quickly as possible, if you have the means.

    AIB don't do Fixed Rate Personal Loans (perhaps you took a business/farming loan?).

    OP, if it was a personal loan, then you definitely have a variable loan and will not have to pay any penalties/charges.


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    #12
    The Rooster
    Registered Users Posts: 4,508 ✭✭✭The Rooster


    aidan.offbeat wrote: »
    So paying back a variable rate loan 2 weeks after getting it, you would pay next to nothing in interest? Or is there a minimum amount of interest charged?

    No, and there's no minimum. You would get charged 2 weeks worth of interest because you had the loan for 2 weeks.


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