Top-Up loan - does apr change?

snoopie2

Hi, I have a small personal loan from my bank Barclays of £1,000 over 12 months, the payments are £63 p/m. I think the apr is 17.4 or 14.7, I forget which.

I have received letters saying it's possible to top-up my loan to up to £16,000. I will need to borrow £6,000, so my question is will the apr change? I don't want to borrow £6 on 14.7 when I can get it elsewhere at 8.8.

If the apr does change, let's say to 10.9, how does that effect the original £1,000 loan? I only have 5 payments left so it may be easier to get the new loan at 8.8 elsewhere.

Phantom_Flan_Flinger

I'm not sure if all banks work the same.

I done similar with Northern Rock in the past. The top up was actually a new loan, with a new interest rate. The old loan was given a settlement figure, so that was effectively closed. That settlement figure was then added on top of the new loan.

You'd have to phone Barclays to confirm what they'd do.

Unless you've actually gone through an application process, you won't know that you'll get a new loan at the 8.8% APR you've quoted. Remember that they advertise their rates as typical. What you see is not necessarily what you'll get offered.

babyboo_3

Yes the above is true. I have got a loan with A+L at 8.9% and wanted to top it up by 5k.Went through the whole application process only to find the rate they could offer me was now 12.9%..grrrr ( She didnt explain to me that this could happen and gave me all the figures based on my exisiting rate, they shouldnt be allowed to be so deceiving.