Loan Advice (is this the next best step?)

fluffy123

Hi all, just some advice as to whether this is the right way to go!

Currently have a loan with my bank at a rate of around 8.5% apr and it stands at around £10,500 remaining right now and I’m currently around £900 overdrawn too. I pay around £272 per month towards the loan. I’ve noticed that Sainsbury are offering a loan of 7.9%APR with a 3-month repayment holiday for nectar holders. Therefore, my thinking is to apply for a loan of £10,500 (which has quoted me an initial rate of £258 per month with a 1-month repayment holiday), pay off the loan and use the three-months of non-repayment to effectively pay off my overdraft.

Does this make sense/sound good?
Thanks in advance

BenL

My initial thought it "They won't offer you 7.9%"

Although 66% off apporved applicants have to be offered that rate you might not be in their ideal target market.

You owe a competitor £10,500 and they have no guarantee you will pay that off with your new loan.

You are using your (authorised?) overdraft to fund your day to day life.

I'd keep with your current loan, cut down and get paying back.

fluffy123

That's true and I see your point but I'm not particularly struggling to pay the loan as it is, I would just rather get the overdraft paid off quicker and I'm seeing this as the best possible option to do it rather than decreasing it over the next number of months.

I guess nothing hurts in applying and seeing what happens....