Repaying BOI term loan faster - possibility/consequences?

L1011

I have a fixed rate term loan with BOI for 14K (unsecured car loan) taken out in August 2008 for 60 months, so it'd be about half paid off now taking interest in to account

My circumstances have changed quite a bit since I took it out (for the better, somehow!) and I'd like to just get rid of it, but can't do that in one go; I'd like to increase repayments from their current ~300 to 500 a month.

The contract text seems to imply that if its paid off early in full you can save on interest but that if payments towards it are made that the bank can ask you to pay the interest they would otherwise have made on it. One of these alone would make sense, both being on the text in subsections directly after each other doesn't!

Anyone have any experience of paying one of these off before? I can't see them being too unhappy to take extra money right now but I'm not willing to end up paying more than I have to either.

phormium

You would need to check with them, most fixed rate/term loans are set up for a specific payment/term and the computer system is set up to debit the payment each month so usually you cant mess with them. You can pay it off early and there is a formula for calculating how much interest you are refunded but there probably is not a system in place to increase payments.

chris85

If its a fixed rate loan, as many car loans are, there may be penalties for early repayment.

If it is a variable rate then under the Consumer Credit Act there can be no penalties for early repayment or paying extra each month.

If its fixed check with your bank.