Borrowing in excess of needs

guitaruser

Situation need £5k over 5 years

Been offered £7.5k over 5 @ 6.4% £145 p/m

If i payback the £2.5k I dont need they only reduce the repayment term and not the monthly amount, problem being I can only afford £100 p/m repayment.

As I bank with the lender they are the only lender who will offer me as a recent time of unemployment has seen 2 lenders refuse.

My question is does anyone have any money saving ideas on how to get round this? Put the extra £2.5k into a high interest account?

Thanks

regularsaver1

If you can not afford £145 then don't do it

would the bank not have seen you do not have the disposable income?

guitaruser

Its not really a case of affording more a case of not wanting.

I only like to spend £100/month on my car loan.

I have thought though the extra interest on £7500 over the 5 years is about £400. I think the best thing to do would be to take this loan. Put the 2.5k into a high interest account. Pay the extra £45/month out of the £2.5k. Then next year pay off the loan in full and take out a new loan once my rating is back up. Unless anyone has a better idea!

asandwhen

guitaruser wrote:

Situation need £5k over 5 years

Been offered £7.5k over 5 @ 6.4% £145 p/m

If i payback the £2.5k I dont need they only reduce the repayment term and not the monthly amount, problem being I can only afford £100 p/m repayment.

As I bank with the lender they are the only lender who will offer me as a recent time of unemployment has seen 2 lenders refuse.

My question is does anyone have any money saving ideas on how to get round this? Put the extra £2.5k into a high interest account?

Thanks

I take it your talking about Lloyds tsb.... The way round this would be to take the loan over 7 years pay the lump some back and that should work out about £100 over 5 years.

guitaruser

Thanks but the problem is they only have a max term of 60 months.

And yes it is lloydstsb.

regularsaver1

what about another bank?

guitaruser

Northern rock said no, A&L said no (have loan and mortgage with them)

Lloyds TSB said yes and the cash is there tomorrow.

I have done the maths and its not to bad if I change it after the 12 months

asandwhen

lloyds definately do offer loans over that period - upto 7 years.

regularsaver1

sounds like you already made up your mind

guitaruser

I think so assuming the maths is right

£2.5 k to drip feed the payment for 12 months @45p/m leaves £2kish

12 months at £145 pays off £1740 in 12 months

12 months interest @ 6.4% = £252

Subtract £252 off £1740 = £1488

£7500 - £1488 = £6012 remaining

£6012 - £2k (left from thew feed account)

£4012 left settle loan (+ upto 2 months interest £4050)

Take out 5k loan pay off the original, and left with £900 odd quid

Paid £1200 out over previous year, so its cost me a total of about £300.

Then I'm back to the £5k £100p/m @60 months with £900 contingency.

Jesus I have really confused myself now!

regularsaver1

and me !!!! ha ha