Dan M asked:
I have a 7 year loan, of which I have 3 years left. If I increase my repayments to 3x my current payment will this cut the time from 3 years down to 1?
I have a 7 year loan, of which I have 3 years left. If I increase my repayments to 3x my current payment will this cut the time from 3 years down to 1?
It depends what kind of interest you have. If it’s simple interest, then yes it should. If it’s a sum of the digits loan, you’re screwed. I don’t remember what that means but I remember my economics teacher saying that’s really bad.
No, it will more than likely cut it down even more…to anywhere from 9-11 months (depending on your interest rate) because you won’t be paying interest all of that extra money you’re throwing at your balance.
Try this link for a loan calcualtor. Get your outstanding balance and interest rate and then iterate Number of Years until you arrive at the loan payment you want to make.
This should give a decent estimate.