Should we find a better deal?

whereschris

My girfriend has a loan which she took out without my knowledge. It is through HSBC. She has lost the paperwork but has requested that it be re sent. It is some kind of reward thing so she will get money back once paid. On her statement it says that there is £3000 left to pay. We were told in the branch that she could settle it for 2500 and would recieve £490 back.

Any ideas? The interest rate is 13% and there is three years left on the loan. I've seen lower interest rates advertised.

We would be really greatfull for any advice.

Rafter

Chris, hard to advise without the paperwork and details of your gfs credit history.

Sounds like a loan with payment protection though - so likely to be costing more than 13% when the cost of that is added in - even with the rebate.

Loans under £5,000 don't generally qualify for the best interest rates, and the rate you get offered will depend on other borrowings, income, housing status etc.

Good luck

R.

whereschris

Ok. I'll find out exactly what it is asap. So am I right in assuming that i will get a better deal then?

Rolandtheroadie

I'd get an interest free credit card an pay off the £2500 (add 3% for balance transfer or credit card cheque is another £75).

Egg are doing £30 cashback through quidco and interest free till October 09.
Use the £490 to pay to the CC then you have a year (at 0%)to work on the £2010.

whereschris

Good thought. Are there any down sides to doing this?

Rolandtheroadie

Do you think you'd be diciplined enough to pay off the balance by October 09? (Forgot to add the £75 so it would be 2085 left).

If you've not paid it off in full, hopefully you'll have made a big dent in it and if you want to pay extra at any time you can.

The only downside is dont only pay the minimum every month (I'd target paying at least what the loan was costing) and if you feel a credit card could tempt you to spend (I'm not very disiplined at times) cut it up once you've paid off the loan.

whereschris

Sounds good! We will be diciplined but I don't think that w could pay it off within a year. I guess that we will have to search for a ballance transfer near to the end of the deal.