How can I reduce my loan payments?
An option to reduce loan payments is to extend the term of your loan, which may lower the associated interest rate. However, don’t forget that doing this will mean that more interest could be paid overall.
Have you considered switching to another loan? Doing so could mean that you benefit from a cheaper interest rate that will considerably reduce your monthly repayments. If you do decide to switch, make sure that you are aware of any additional fees or charges that may be attached to the new loan.
Ask your lender about making extra payments. If your loan was taken out after February 1st 2011, then within a 12 month period, you are eligible to make extra payments of up to £8000 without penalty. This would reduce the cost of your loan overall, and help you to repay the agreement sooner than expected. If your loan agreement does not mention overpayments, make sure that you contact your lender first to give notice of your intention to make an overpayment and do so within 28 days of sending the letter. This is a great option if you should come into a little extra cash such as a work bonus or birthday present, and even if you only make one overpayment, your future loan repayments, loan term and interest payable could be reduced. Your lender will be able to tell you how they would apply the overpayments to your loan.