Prematurely repaying a loan

T

tloan

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I borrowed 15000 two years ago to purchase my first car. I have since payed over 5000 of this back. I now want to clear the remainder in one payment. I have over 10000 in savings and i`ve decided to use this to clear my outstanding debt. My quetions are, will i be charged extra for doing this?
A friend has actually told me that i may get some of the interest i`d payed back. could this be true?
Thank you.
 
It really depends on what type of car loan it was.

Your friends advice does not sound right.

Car loan lenders sometimes charge all the interest up front but then if you repay early, they will give you a rebate. This is probably what your friend means.

The only way to find out is to read the loan agreement and to get a balance outstanding from the lender.

Brendan
 
If your loan is with a Credit Union, you get a percentage rebate on the interest paid annually - so maybe this is what your friend was referring to. This percentage is set by the individual CU and my local one gave a rebate of 3% for last years payments.
 
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