5 years loan. 36 months to go.

rfeenie

Hello

I currently have a 5 year loan with Liverpool Victoria, interest rate back on this is 6%. I pay £269.62 a month. Once my august payment is paid in August I will have paid up to 2 years.
The 36 month would seen a good time to try and shift to a lower % rate elsewhere.

Can anyone recommend what to do?
a) A lower loan 5.6 or 5.7%. I dont think Liverpool Victoria charge for early repayment.
b) Paying the loan off with a credit card, I've just read this ( http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1094822880,81886, ) and was hoping signing up for an Intelligent Finance card might help. However there terms state:

"Please list details of all your other cards in the boxes below. Additionally you can transfer balances from other credit and store cards to your new card (please note, transfers from loan companies, bank accounts and other cards issued by Halifax (including Intelligent Finance) and Bank of Scotland are not accepted). Simply fill in details of the cards and the amounts you wish to transfer and tick the Transfer box. On approval of your account we will arrange to make payments directly to your other card issuers. Unfortunately we cannot process transfers from Index, Courts, MFI, Littlewoods, Naafi, Warrior, Adams Store Card and Next Gold Cards. We may need 14 days to make the payment so please continue to make payments on your cards as normal until the balance is transferred. We will only transfer balances (min £100) in the order they appear here. The amount of balances we transfer will depend on the credit limit allocated. Please enter whole pounds only e.g. 100 and not 100.00
"

As my current account is with the Bank of Scotland am I then not able to use this way to pay the loan off?

Total loan payment is £16,177.20 and I will have paid off £6470.88 by the 23rd August 2006. This will leave £9,706.32 to be paid in 36 months.

Basil_Hume

I think you may find that you currently owe more / have paid off less than you think.

The lender will operate according to a calculation (rule of 78?) that loads the interest towards the front of the repayment term, plus any additional early settlement charge they may make.

I suggest you get a settlement figure as the first step. Then work out whether the remaining repayments on this loan for the period will be more / less expensive than a new loan for the same period.

105k

Personally, I think 6% is a good rate for a loan and shifting it probably won't save you anything.

Assuming the settlement figure is £9706, over three years, at a rate of 5.6% your payment will be around £293 a month???

Unless you know what you are doing credit cards can be more trouble than they are worth and the balance transfer offers aren't quite what they used to be.
Just my opinion though:)

happyformonths

I would also agree. I don't think that for a potentially 0.5% lower rate it's worth trying to change the loan. 6% isn't a bad rate. If you

If you do want to investigate (after all, it never hurts to have the figures), get a settlement figure as you've already been advised - you might well find it's more than you think because of the Rule of 78. You may also find that a balance transfer fee would be applied if you WERE able to transfer the loan to a credit card, which would cancel out any small benefit of a lower interest rate.

But do the sums and see.

In answer to your original question, I think they'd probably refuse to transfer a Bank of Scotland loan if they've said that they won't transfer from other BoS cards or "loan companies". But you can always ring them and ask - then you have it from the horse's mouth.

HFM

rfeenie

Thanks for hte replies guys. I'll report back in 3 weeks once the 24th monthly payment is done, then I can also get a final settlement fee.
I've phoned Liverpool Victoria before and I'm sure the final payment was quite a bit lower than my final payment figures.

Luke

If you have a look at a loan table on moneysupermaket for your loan amounts and timescales I bet the difference in cost per month between 5.6% and 6% is far less than you think.