Making additional monthly payments to a car loan

I currently have a loan of €7,000 which I am paying back over a 5 year period, I can manage the monthly repayments and have recently received a payrise which leaves me with some extra money each month, can anyone advise what would happen if I transferred this extra money to my loan account at the end each month i.e. will the bank take the extra off my loan each month, is there any penalty for this.

I would prefer to leave the loan on the same term and monthly repayment for the moment and perhaps review in six months and change the term to something shorter.

What do the terms & conditions of the loan agreement say about accelerated repayments/early redemption? If it's a fixed rate loan, and possibly even if it's not, there could be penalties for doing this.

eavan1 said:

...can anyone advise what would happen if I transferred this extra money to my loan account at the end each month i.e. will the bank take the extra off my loan each month, is there any penalty for this.

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You'd have to check the Ts&Cs of your loan to find this out (or contact the bank and they should be able to fill you in on the details). Loans can come with all sorts of different structures/costs/fees attached so no one size fits all answer to the question.

Edit: post crossed with CM.

will check the terms and conditions this evening and see what they say - thanks for the advice