Can one pay off a personal loan

[Kdes]

Good Day

For example if one gets a personal loan.
Can one pay off the capital amount or does one pay off the interest amount first?

For example i got a personal loan for 60 months.

I want to pay this off in 3 months. Does one have to pay the full interest amount that is owed for the 60 months? Or can i simply pay off the capital amount with the interest of the 3 months? ie capital + interest of only 3 months instead of 60

I hope i made sense.

 

[The_Ogre]

You call them and ask them for the settlement amount

 

[tcofran]

This

You call them and ask them for the settlement amount

 

[mercurial]

You call them and ask them for the settlement amount

This. The settlement amount will be slightly less than the current outstanding amount.

 

[Shi]

https://www.standardbank.co.za/secure/applications/loans/RCPterms.pdf

Standard Bank's Revolving Credit Plan has the following (similar to a home loan)

Early repayment You can pay the outstanding balance of your loan, including all interest due, in one amount provided you give us at least 90 day's advance written notice (or shorter notice period agreed by us) of the date on which you intend to settle the debt.

Other places might have similar

 

[Kdes]

Thank you, i went through a phone automated service and got the settlement amount.
It sounds like if you pay the settlement amount in full you can close the account?

 

[Messugga]

Thank you, i went through a phone automated service and got the settlement amount.
It sounds like if you pay the settlement amount in full you can close the account?

Yes. Hence why it's called a settlement amount. It settles the loan.

 

[Thestealth]

Thank you, i went through a phone automated service and got the settlement amount.
It sounds like if you pay the settlement amount in full you can close the account?

Absa closes it automatically after 2 days once settlement is paid.

 

[rietrot]

Interest is a function of time passing.

It gets calculated according to how much time passed. If the time hasn't passed yet you don't pay it.

If you take R1000 loan at 10% interest per year

After one day it is R1000 x 10% x1/365
Interest then also gets compounded only monthly.

 

[mercurial]

Yes. Hence why it's called a settlement amount. It settles the loan.

Glad that's settled.

 

[themba990]

Glad that's settled.

An interesting turn of events.

 

[AchmatK]

Interest is a function of time passing.

It gets calculated according to how much time passed. If the time hasn't passed yet you don't pay it.

If you take R1000 loan at 10% interest per year

After one day it is R1000 x 10% x1/365
Interest then also gets compounded only monthly.

You would think this would be something covered in school at some point.