Advice needed! Unsecured loan scenario

Jo_R_2

Hi!

I have an unsecured loan with Intelligent Finance. I have been seeing how snowballing it might reduce the total amount payable, and dug out the credit agreement. This is what it says:

Particulars of loan:
Advance: 5900
IF Creditcare Gold: 3382.47
Amount of Credit: 9282.47
Total Charge for Credit: 5522.65
Total Amount Payable: 14805.12

96 monthly instalments of 154.22, APR 12.7%

Since very recently doing my research on loans and loan insurance, I am astounded at the actual amount I am paying back! Call me naive but I didn't realise I would pay interest on the insurance - I feel like a total fool for somehow being blind to this!

I have been sat looking at these figures and am realising I am paying IF 5522.65 in essence to borrow 9282.87 and it makes me feel sick!

I took this loan out in 2003 when I moved in with my partner, to consolidate the debts he had (around 5 or 6 different finance agreements/store/credit cards) and the credit card I had at the time. It did save us around £300 per month. A year later we added some more on to finance my PhD fees and for equipment for his uni course.

It is flexible and I can overpay, but have never done so. I am wondering now whether to see if I can get a better deal elsewhere?

Any pointers or advice welcomed!

Old_iron_balls

might be worth a trying to cancel the insurance and possibly getting a refund on it ?

if you do look elsewhere, you need to check that there isnt a penalty for ending your loan early

Jo_R_2

I have thought long and hard about whether to cancel the insurance, however in our current situation, the fact that I am the main earner (boyfy full-time student) and pay the loan, and we don't have any savings is a major factor. Also I was ill after the birth of my first child and with our second due at the end of June and the chance that I could be ill again and have to take time off work an unfortunate but posssible potential scenario, I would rather keep the insurance.

I asked when taking the loan out about overpayments and paying it off early and they told me there were no penalties for either so that shouldn't be a prob. I just feel like a total fool now I have understood this, when I thought I was getting a good deal (APR 12.7% looks not so bad on paper...)

Ah well, you learn from yr mistakes...

jonesMUFCforever

I would agree that asking to cancel PPI at this stage would not be a good idea given your circumstances.
However it does not stop you asking them to look again at your loan to see if they will give you a lower rate of interest.
Be very careful if they do though as this will cancel the original loan (and PPI) and you will have to inform them of your prior medical condition on the new PPI.
If the condition is/was not serious it may well be worth your while to see if you can get cover independently of the loan to save more.
Good luck.

Jo_R_2

So is it feasible then to ask about a lower rate of APR - is this something that is "done" so to speak? I have a good payment record since the loan started, so I guess that would go in my favour hopefully.

I will definitely check out alternative PPIs though, that was something I hadn't thought of.

Thanks!

jonesMUFCforever

Yes it is feasible.
If your credit history is now better than it was then other lenders may be itching to take the loan off their hands!
Just remember to clarify the position regarding the PPI before you actually sign anything!