Please can I have some advice?

atypicalblonde

Dear All
I am writing to ask for advice on my OH's loan. It is with his bank - I am unsure of the amount he borrowed but the total repayable is in the region of £8,500. I know his APR is 19.9%. :eek:

Would it be wise to request a final settlement figure and get a loan at a cheaper rate to pay it off, thus saving him on interest charges in the long run? I am not very clued up on 'typical' loan rates, so any help would be greatly appreciated. (he is not a homeowner BTW)

Thanks you ever so much in advance xx

Astaroth

Depending on how long is left to run on the loan then it would certainly seem wise to get a lower rate APR - loan rates havent been this high for "normal" borrowers for a very long time though.... when did he take the loan out? Are you aware of any reason why he may be considered a bad credit risk?

atypicalblonde

Well he is paying £160 per month.... roughly equates to a long time left I think!! he took the loan out 1 year ago, he doesnt have impeccable credit but isnt the worst at all by far.... just a mobile phone debt that went to debt collection and was then paid off in full, he has never missed a payment on his loan...

mrcow

Well £8500 @ 19.9% apr will take you 11 years to pay off at £160 per month.

That £8500 is going to cost him well over £17000 by the time he's finished.

What was the loan used for? If it was a car for example, then he'd be wise to sell the thing and get something he can afford.

Request a settlement from the loan company and by all means look at alternatives. What do his T&Cs say about overpayments?


Who is the loan with?

atypicalblonde

Used to pay off other debts unfortunately....it is with Lloyds. I understand the poorer your credit score the higher your APR, but surely his average credit scors could afford him a better rate?

Thanks in advance to all who are helping me... this will make a big difference to us if we can lower it. Will be contributing all birthday/Christmas money to making overpayments where possible xx

mrcow

atypicalblonde wrote:

....it is with Lloyds

Okay so that's what I'm not really getting. I didn't think Lloyds would offer a personal loan over such a long period of time.

On their website, their maximum term is five years and I'm not sure if they allow overpayments.

You need to get the original paperwork and take a look at the terms on this.

jonesMUFCforever

Ltsb do loans up to 7 years but only to good 'credit score ' customers certainly not at 19.9%. It looks like he is on max 5 year term.