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Sounds good, but is it. Loan restructuring

wooderz
wooderz Posts: 13 Forumite
Hi All,

Just a piece of advice if possible! I have 2 loans that I am currently paying off quite comfortably, no problems, but I have just bought a flat, so any drop in outgoings is welcome.

Well I thought I'd just get a loan quote to consolidate these two and see if it works out cheaper. Well, turns out to consolidate them, over the same time they have left is nearly £150 cheaper a month. Have I missed something here, or is it just that to consolidate them does make it cheaper?

Thanks for any help you can give :)

Comments

  • kevin_M
    kevin_M Posts: 551 Forumite
    hey wooderz

    it all depends on APR. say for example the 2 loans u have atm are at 24.9 apr and the new loan your taking is at say 8.9 apr. if that is the case then yes jump on it thats why its cheaper. over the term your paying a lot less intrest

    but if the apr is the same then it WILLNOT be cheaper and u will of made a mistake :)
  • wooderz
    wooderz Posts: 13 Forumite
    The APR on one of them is about half....I think when I took it it was 17% and the consolidation is 7.9. The other is about 1% cheaper...i.e it was 8.9.

    One thing I thought about though, is the smaller of the two I'm consolidating would normally expire sooner than the consolidation. So yes it's cheaper now, but in 2 years when it would have finished it could then cost me again? I'm a little confused lol
  • marshallka
    marshallka Posts: 14,585 Forumite
    wooderz wrote: »
    The APR on one of them is about half....I think when I took it it was 17% and the consolidation is 7.9. The other is about 1% cheaper...i.e it was 8.9.

    One thing I thought about though, is the smaller of the two I'm consolidating would normally expire sooner than the consolidation. So yes it's cheaper now, but in 2 years when it would have finished it could then cost me again? I'm a little confused lol
    Just a word of warning, have you requested the settlement figures here or have you calculated them yourself. You have to make sure you know the amount to settle them...
  • wooderz
    wooderz Posts: 13 Forumite
    marshallka wrote: »
    Just a word of warning, have you requested the settlement figures here or have you calculated them yourself. You have to make sure you know the amount to settle them...

    No I haven't got the settlement figures yet, I suppose that's worth doing, there aren't any penalties in just asking for the figure is there?
  • marshallka
    marshallka Posts: 14,585 Forumite
    wooderz wrote: »
    No I haven't got the settlement figures yet, I suppose that's worth doing, there aren't any penalties in just asking for the figure is there?
    Shouldn't be if they are fixed. Some companies (the really nasty sub primes ones) do put up interest rates when you ask just to keep you netted.
  • wooderz
    wooderz Posts: 13 Forumite
    marshallka wrote: »
    Shouldn't be if they are fixed. Some companies (the really nasty sub primes ones) do put up interest rates when you ask just to keep you netted.

    It's Egg and Beneficial Finance so I'm assuming they're not sub prime nasties?
  • marshallka
    marshallka Posts: 14,585 Forumite
    wooderz wrote: »
    It's Egg and Beneficial Finance so I'm assuming they're not sub prime nasties?
    Should be ok there but just thought you ought to be aware of the interest payable for early settlement and also ask if there are any fees too.
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