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If you want to pay off your loan early, you need to ask your lender for a settlement statement. This will tell you exactly how much you will have to pay and how the figure is calculated. Your lender won't charge you all the interest outstanding on the agreement unless the loan only has a few months to go. Instead they will calculate the loan settlement figure using "the rule of 78" (a calculation governed by the consumer credit act 1974).
Some lenders will charge an early repayment penalty and, if applicable, these will be included in your settlement figure.
It is a good idea to check out the position on early redemption penalties before you agreeing to take out your loan. Ideally, you want a lender who does not charge these penalties. You speak to your loan broker about this issue.
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