In a position to pay off car balloon payment loan

A question about : In a position to pay off car balloon payment loan

Hello there

I'm in a position to pay off my car loan (around Ј12k I think, but will need to call for a settlement figure).

Someone told me that it would be best, in terms of paying less interest, to pay off the majority of the loan less a couple of hundred, THEN ask for a settlement figure. That way I'd pay less interest. Is this correct?

Also if the money is in my husband's name, can he pay the loan off for me with his card/cheque, or does he need to transfer the money to my account for me to do it?

Any advice?

thanks

Best answers:

• Read the T&C's of your contract, but normally with car finance, you are still charged the 59 days interest on overpayments, just as you would be for settling early.
• Thanks SeanG79.
  So there would be no difference either way? I might as well get rid of the loan altogether.
  What about transferring the money from my husband, or can he pay it with his card/cheque?
• They will normally accept a debit card payment but not a credit card payment. You can pay by cheque too. Normally when you call the finance company, they will provide you with a settlement figure (make sure it is a settlement figure and not a balance outstanding), they figure will be valid until a certain date.
  As in my previous post, read the T&C's of your agreement to see how overpayments are treated.
• Thanks
  He will use his debit card to clear the balance, but if there's a fee, he'll send a cheque.
• The will send the settlement figure by post if you ask
• I'll check about the debit card, as it would be far more convenient to pay like that!
• I am not going to argue with you about debit card payments, Black Horse - no charge, Close Motor Finance - no charge, Santander Consumer - no charge.
  Finally overpayments, it is NOT a penalty charge, a settlement figure is calculated as 28 days + 1 month from the date of notification. (that would be the amount owed to the finance company if you paid on that day - from that figure, whatever overpayment (partial settlement) you make is deducted, giving the balance owing, which will then continue to accrue interest at the rate stipulated in the agreement). Depending on the finance provider, they will then either shorten the term of the agreement and keep the monthly payments the same, or they will reduce the monthly payments and keep the term the same - need to check contracts as it varies among lenders.
  Additionally as I said there is no penalty for an overpayment, however most vehicle finance contracts include the following clause
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