Lower interest for mone money?

maureen_04

I want to borrow £5k, however the interest rate is cheaper if I borrow £7k.

Is there anything to prevent me from immediately paying back the extra £2k on the loan and continuing to pay the balance at a lower rate.

Not sure if I would benefit from this or not.

Thanks.

KiKi

Depends on the T&Cs of the loan - does it allow early repayments?

KiKi

stu12345_2

it might be harder to borrow 7k than 5k, when i had a loan i couldnt repay it early had to pay it over the term
maybe it is cheaper to borrow 5001, that might be the changeover low interest point.

zppp

maureen_04 wrote: »

I want to borrow £5k, however the interest rate is cheaper if I borrow £7k.

Is there anything to prevent me from immediately paying back the extra £2k on the loan and continuing to pay the balance at a lower rate.

Not sure if I would benefit from this or not.

Thanks.

Depends on whether the loan company has switched ready for the Consumer Credit Directive to take force from 01 Feb. The reason is that paying a lump sum back is possible, but you would have to pay a 58 day interest penalty on the amount repaid. It would all depend on the APR and total amount of interest payable on the loan tbh.

maureen_04

I was not aware of the new directive; I will have to check the small print of the loan, just wondered if it would be to my advantage to do it.

Thanks! :rotfl: