Loan to pay off HP

rnturner1

Hi there

I am looking to refinance my current HP agreement that i used to buy my car in 2003. I was ripped off at the time but had no alternative as my credit score was in my boots at the time. I am now in a better position and would like to reduce my monthly payment for the remainder of the term being 18 months. On a loan of 4800 over 4 years i am paying back a total of 7354, i shall let you do the maths, i am too embarressed. I now owe, settlement figure wise, £2600 and am planning to take a cahoot loan out to settle this. The new loan will be over 24 months and run roughly for the same amount of time that i had left for the original finance bar a few months. I was just wondering if this was a wise move, i feel it is, but i am not that money savvy and would like to hear any comments, once bitten and all that!!!

Rafter

Cahoot will charge you 8.9% typical for that size loan.

You may be better off applying for their flexible loan at 6.9% APR and then only drawing what you need - the rate goes up after 12 month but you will still save yourself £40 in interest overall.

Either way that has to be better than the 25% apr you seem to be paying at the moment!

R.

rnturner1

Thanks! I did apply for a loan with Cahoot ( i bank with them), when i reached the approval page they revealed they will be charging me 11% instead of the 8.9% advertised, which was nice . So you think the flexible loan is the way forward.

andyf1702

I am not sure how loans work, but you need to make sure that you have not paid the interest on the original loan already - the interest for the next 18 months may have been added to the settlement figure.

If this is the case, then you will not benefit from getting another loan - you will just be paying interest twice.

Andy