Loans with no penalties for early repayments

mackie78_2

Hi folks,

I am looking to purchase a car for about £8k to replace my existing car.

I'd get about £4.5k back on my existing car and can access a further £2k in about 2 weeks time.

Is there anywhere I can get a loan from where there are no penalties for early repayment but I can get a reasonble rate???

My credit rating should be good I have a decent wage and mortgage and credit card (0% - £1500 balance) that I always pay 4 x the minimum payment off each month.

Have looked through some recent posts but cannot find anything on this matter.

THANKS & GREAT FORUM!!! :T

graemeuk_2

Zopa has no penalty for early repayment and you can make ad hoc payments as your circumstances change. I can't post links but you should be able to google it.


However they don't always have the most competitive rate - though depending on your credit rating with them it is not bad.

Graeme

mackie78_2

Thanks Graeme

I've had a look at their site and I'm fairly hopefull I would get approval from them.

Does anyone know, if I loaned £10k to get a rate of 7.9% and then payed back say £7.5k over the next 4 weeks, would they adjust the rate upwards to penalise me???

graemeuk_2

I know that Zopa would not.

The only thing you would pay is their £156 fee (included in the loan so you don't actually pay it)

You would also pay the interest for the time you had the money but no surcharges etc. You then have a choice of reducing the term or monthly payment.

Gorgeous_George

The borrower's fee is £124.50 (link)

Search MSE for 'Zopa referral' and choose a referrer to recover part of the £50 Tell a Friend bonus.

GG

Gorgeous_George

mackie78 wrote: »

Thanks Graeme

I've had a look at their site and I'm fairly hopefull I would get approval from them.

Does anyone know, if I loaned £10k to get a rate of 7.9% and then payed back say £7.5k over the next 4 weeks, would they adjust the rate upwards to penalise me???

You would pay more doing this than just borrowing £2.5k in the first place.

The more that you borrow, the higher the average loan rate from Zopa's lenders. You get matched to the cheapest money available at the time of application. So, the more that you ask for, the more expensive the loan becomes.

The £124.50 fee is added to the loan and is fixed no matter what loan size you apply for.

When you repay, it is true that you are not penalised. But you've still paid the £124.50 fee. And you still have the same (elarged) set of lenders.

I hope that's clear.

GG

Mags_cat

I had a loan from my bank (Lloyds TSB) to buy my last car.

I set up a S/O to overpay it every month. I was overpaying by 100% every month (so basically halved the repayment time). I lost out on two "cashbacks" of £40 each because the loan paid them on the anniversary of starting and mine only ran for 18 months.

There were no penalties (apart from the loss of the cashback) by doing this. I cancelled the S/O when the loan balance was down to under one normal month's payment so the last month they just took the remaining balance as a D/D.

Perhaps you could do the same, but make the overpayment much bigger to clear it faster? Obviously - check the Ts&Cs first.

mackie78_2

Hi thanks GG

I need to buy the car this week and then sell my existing car and cash in some shares to raise the other money. I will need to pay the car before I can get any of the monies I want to put against the new(er) car purchase. Hence why I want to borrow more.

The Zopa site are offering slightly better rates the more you borrow
<£7100 - 8..1%
£7200 to £8300 - 8.0%
£8300< - 7.9%

I thought (maybe wrongly) that if I borrowed 8300 (not 10k as I said previously) by the time I paid 6-6.5k off the remainder over the 3 years would be better at 7.9% as opposed to 8.1%.

Gorgeous_George

The rate falls because the borrower's fee of £124.50 is fixed. It's effect on the APR is greater with smaller loans.

All in all, you will probably do well with a Zopa loan - especially if you use a referral from the MSE forum.

Good luck.

GG