Flexible Loan Advice

Debtfreedude_2

Hi all...hoping to get a little advice on a Flexible Loan.

I am looking to borrow about £6k to put towards a car. Now I would like a loan that is base related and that enables me to make extra lump sum payments.

I understand Flat Rate Personal Loans are front loaded with the interest and so when you repay early you are in effect no better off since the early repayments of your loan are primarily made up of interest. Am I correct here?

I would like to be able to pay the loan off early (as I get regular commission payments) and also to pay less interest since the loan would be structured in such a way as the interest would be calculated monthly based on the outstanding balance.

I am told such mystical loans do exist...I wondered if someone in the know could advise if I am right and where I might find one!

Many thanks in advance

T

Rafter

T,

1. Why would you want a loan that was base rate linked when base rate is only 0.5%, surely if they rose your total interest bill would be much higher?

2. Loans aren't front loaded with interest, you are just borrowing more at the start of the loan than at the end because you are paying your loan off each month. On average with a £6k loan you will be borrowing £3k - £6k at the start and £0k at the end. No loan company is going to smooth the interest - particularly on a flexible loan.

Flexible loans do exist but they aren't very common any more. The post office at 9.95 is the only provider listed on moneyfacts.

Good luck

R.

richard9991

cant advise on loan but hsbc do them at £20 a month Per every £500 you borrow per month eg £6000= £240 per month dont know if you ned to have bank account with them though