Repay loan with savings ?

Q

quigs2

Guest
Probably a dumb question. I took out a 16,000 euro loan about 3.5 years ago. 330 per month personal loan from AIB. 1.5 years left to run on it and noticing that the interest charge is quite high now up to 11.7%. I owe 5,500 on the loan at this stage, and have paid perhaps 600 euro interest on it so far this year alone.

However a recent cashsave I set up has 12,000+ in it and is earning about 2 euros a year in interest !

I take it that its a no-brainer that I call up my bank tomorrow and have them pay off the balance of my loan with the cashsave account. Or is there something I am missing here ??
 
I agree that it is a no brainer unless you have credit card debt. If you do have then you should pay that first and then pay the remainder off the loan.
 
Pay off the debt. In this instance, you will still have over €6K in savings for a rainy day. Move this to a high yield account (in another bank if needs be).
Start putting the €330 a month in to a decent monthly saver. There are plenty paying 7-8%.
 
check with the bank that there is not a charge for paying back a loan early. However, chances are, you will still be better off by doing so
 
Great, thanks for the advice people, just nipped out to the bank and did that. Am looking at one of those monthly savers also. Have about 700 euro credit card debt too, so think I will get rid of that also. Thanks again.
 
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