Advice on Bank Loans

chorlgirl

Just hoping someone could offer me some good financial advice? Please bear with me if some of my comments sound insanely simple, I'm just that bad with figures!

I took out a Cooperative Bank loan of £2000 10 months ago on an interest rate of 25.36%. A couple of years ago I was in some financial trouble but in the last two years I haven't defaulted on any payments etc etc; I do understand this probably contributes to the high interest rate I'm paying.

I was just wondering what would be the most sensible thing to do regards repayments. The bank has offered to extend the loan by £2000 and drop the interest rate to 18%, would it be sensible to do this and repay the money from the loan immediately?

Ordo I try and find a credit card or another loan with a lower interest rate? I presume my credit rating must be fairly poor given that my bank has given such a high interest rate.

Help! Any and all comments welcomed!

grumbler

Before thinking about all these options it is worth finding out how much it will cost you to repey the loan (part of full) early. I guess you have Personal Loan (as distinct from Flexible Loan ). For this loan:

We do not accept part or lump sum payments unless it is in accordance with your right to settle the loan early in accordance with the Consumer Credit Act 1974.

Terms and Conditions