johnknight001

hi all, quick question please, would i be better paying half of a loan or putting the money towards our house deposit, we have a loan with two years to run and our starting to save a deposit, not sure if its best to leave the loan run or pay a lump of it. cheers for any advice.

JOE2010

Hard to comment without knowing the amount, but in general you are paying on average 12% interest if it is a personal loan and you would expect to earn 6% if you were to start saving. If it is not a big amount it makes sense to pay it off. Any loans you have are also considered when you make an application for a house loan.

Tramps_mate

Yes, I would clear any other loans before applying for a mortgage..

pumpkin blossom

Agree. Pay off the loan first. Then you will cut the interest and in the long run be able to save more.

johnknight001

thanks all, was curiouse because the bank said i was better of saving it and keeping the loan going, obviously for their gain interest wise, will settle loan then continue saving, thanks again.

Bermudashorts

Well they would say that...

paulandcelia

Just been sorting out our home loan - we have a car loan which effected how much we could borrow for the house. Definitely pay off all loans and keep credit card limits low as this is also looked at.

abi31

Bear in mind any early redemption penalties that may be applicable on your loan. But if there are none then yes I agree with the others - get rid of debt before you worry about saving.