Should I speak to my lender first?
Yes. If you want to make a partial overpayment, then a 28-day notice period applies. You’ll be charged interest on the full amount you owe for 28 days after you notify your lender of an extra payment.
If you want to pay your loan off in full, you’ll need to ask your lender for an ‘early settlement amount’ which is a recalculation of what you owe based on:
- What you’ve already paid and the amount you still owe
- What interest charges apply
- Whether they are any early payment fees
Your lender’s obliged to give you this figure if you ask for it, and to give you at least 28 days to think it over. If you decide to pay it you will need to pay the outstanding early settlement amount by the settlement date the lender has given you – otherwise it will need to be recalculated.
If you don't ask the lender for the figure you may end up paying the wrong amount.
You don’t have to pay off the loan if you decide you’d be better off continuing with your monthly instalments.