1) Check if your agreement allows early settlement, might have additional charges for cancellation.

2) Unfortunately for you, because it's a personal loan, it's most likely calculated on Rule of 78 for interest payment. Since it was a 2018 loan and it's already year 3 of the 5 years tenure, you've already paid easily 80% of the total interest they charged to your loan. Any "rebate" from early settlement of personal/car loan is really just interest you will not be paying from your remaining instalments because you've settled loan early.

That's why when you check now, the outstanding loan is still so high, because your previous instalments is used to pay mostly interest, not the loan itself.

You may read about rule of 78 here: https://loanstreet.com.my/learning-centre/h...-the-rule-of-78

If you want to see how much "rebate" you might get, you can calculate here: https://loanstreet.com.my/calculator/car-an...calculator.html

This post has been edited by DragonReine: Mar 24 2021, 02:40 PM

Visual illustration of Rule of 78/Sum of Digits method of interest calculation and payment, using the figures you gave.

Anyone with later versions of Excel can input this into the Loan Amortization Schedule template workbook, it actually shows how the first half of a loan tenure, less than half of the instalment paid goes to pay the loan itself, majority of it is used to pay interest.



This post has been edited by DragonReine: Mar 24 2021, 04:13 PM

Then in that case it's best if you visit bank directly and settle over the counter. I would caution you that your "rebates" AKA unpaid interest at this point is very minimal, and they won't refund interest you've already paid for, as most personal loan agreements would usually indicate that any rebates are calculated using sum of digits method.

Good luck.

This post has been edited by DragonReine: Mar 24 2021, 04:53 PM

Peace of mind from being debt free can be more valuable than considering whether it's financially "sensible" to settle early, sometimes.

IMO if it makes you sleep better to be out of debt, settle it even though you "lose" opportunity to invest the extra cash.

The price of nearly instant approval and disbursement