Slightly stupid car loan - need to get out

chap_in_leeds

Hello

This story concerns someone supposedly intelligent and well educated taking out a stupid car loan. I am now looking to make more sensible arrangements and would be grateful for any advice.

In May 2008 I bought a Golf GTi with a downpayment, loan and balloon payment with VW Finance. I was a bit giddy after passing an exam and didn't pay a great deal of attention.

The loan is at a rate of 14.4% APR and has £7000 balloon payment at the end. The monthly repayments are £250 and there are 15 left. The car is probably worth around £12,500 at the moment.

I have accepted that it was a rubbish deal. I have tried to battle with VW about it but the dealership went out of business and has been taken over by a new outfit. They have been sympathetic and upgraded the servicing contract, replaced some tyres, and one or two other things but essentially there is nothing they can do about the financing.

I have not asked for an early settlement figure yet but at a guess it would be £9000 - £10000

I would like to move the loan to something more sensible. I may need to sell the car at shortish notice in Summer 2012 and would prefer that there was not a loan attached to the car.

I've looked into a 3 year personal loan which works out to be about £300 per month at 7.4% which I could then clear when I sold the car +/- a little extra. I have also wondered about transferring to a new credit card with a long term interest free period, would this be possible?

Any other suggestions

Thanks

CIL

CLAPTON

actually a 14.4% apr isn't that bad
whether you will get 7.4% is uncertain
similarly with a low apr credit card

whether you would or not depends upon your credit record, your income, you job history, your property situation, your total debts etc.

probaly best to get a settlement figure and try for a loan and see what happens

chap_in_leeds

Thank you for replying. To answer your questions, I don't want to sound like a knob:

Excellent credit history
No other loans
No credit cards at the moment
Home owner with mortgage, > 40% equity
Income is hopefully adequate to cover the credit check.
Same employer since starting work

The motivation is more to try to separate the car from the loan so when I do need to sell it I can just try for the best deal and then pay the loan off separately. I like the idea of the 17 months interest free period. I could just leave the money on the card and keep the minimum repayments going without the debt going up and then pay it off when I sell the car.

Will Barclaycard let you move a loan to a credit card?

CLAPTON

No, you can't (usually) pay off a debt with a credit card; you need to check with your loan provider's T&C.
In any event you are unlikely to get such a high credit limit... and without a credit card at the moment I would think a zero chance.

chap_in_leeds

Thanks.

Sorry, I wasn't clear.

We have a excellent credit history, checked at the agencies.
Just don't have any cards or loans at the moment other than mortgage.

YorkshireBoy

chap_in_leeds wrote: »

We have a excellent credit history, checked at the agencies.

You paid for a random worthless number?...or viewed your credit report? Hopefully the latter, because the former is a waste of money!

Just don't have any cards or loans at the moment other than mortgage.

So the only 'active' credit accounts showing on your credit report are the mortgage and car loan?

How many settled accounts are showing? And when were they settled? And what type were they?

zppp

chap_in_leeds wrote: »

Thanks.

Sorry, I wasn't clear.

We have a excellent credit history, checked at the agencies.
Just don't have any cards or loans at the moment other than mortgage.

Unfortunately, what you may deem as excellent may be assessed as fair by some lenders and poor by others. This is becuase every lender has different criteria for borrowing.

chap_in_leeds

Hi

We got full credit reports.

We had a suspicion of identity theft a couple of years ago and have been keeping an eye.

There are 3 mortgages showing as paid fully, the most recent being about 4 years ago, our current mortgage shows as being up to date.
About 4 credit cards of various types. All paid. Most recent 2 years ago.
About 3 loans. All paid. Most recent 3 years ago.

The active items I think are the mortgage and car loan.

chap_in_leeds

Anyway, assuming that I can get a loan at around 7-8% APR, which I accept is not certain, what are the options?

ILW

I would get the settlement figure and take it from there.

paddyrg

Being able to put £9k onto a brand new interest free card sounds unlikely, so your best bet would probably be to get a cheaper loan, settle the VW finance, and pay off the loan as fast as you can. Try zopa if you've got good history and if you can pay it off faster, you're allowed to without huge penalties. But first see what the settlement offered by VW is :×)