Can you afford more?
26 May 2008
Fixed loans are usually limited in how much they will allow you to repay beyond the set repayment schedule. Many will not allow any extra repayments at all, and this is to ensure that the fixed rate given is not taken advantage of in order to repay a loan in a short time with very little interest charged. This means you can keep stable repayments for a short period of time and may even have a lower rate, but if you can afford more earlier on, will fixed loans be beneficial to you?
Reducing the principle of your loan is the most direct way you can reduce the amount of interest you are charged. If you know that fixed loans are likely to have rates that take interest rate rises into account, then you know that not being able to pay more of the principle now could mean you pay much more interest in the long run. Fixed loans can be worthwhile, but if you are capable of affording more in payments than fixed loans require, you are likely to be better off paying sooner rather than later.
Please browse our site to learn more about fixed loans compared to variable loans, or visit our comparison page to find a range of lenders willing to offer fixed loans.
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