A little help if you don't mind re: a loan

Stick-a-five

Hi everyone

Thanks for taking the time to read my post.
I apologise now if this has been posted before and please don't write rude messages beneath telling me to read this and read that before posting. I am only asking a simple question.

I took out finance with BMW when i bought my car. I currenly pay £260 per month for 60 months on a car that was originally £12000 I know I am paying back at 12% when is £15600 over the time period. I am currently 2 years into the 5 year deal. I have called them tonight and they've offered me a settlement deal of £8100 which I am unsure if this is good or bad. I realise if I keep paying the remaing £260 a month for the next 36 months I'll be paying £9360 back over the time.

My main question is would it be advisable to take out another loan from a lender offering 7.2% and pay off the BMW loan and then re-pay the new loan. I would imagine I've a very good credit rating as I've never paid interest on anything.

I'm not great at this sort of thing and would really appreciate any help anyone of you could give me.

Thanks very much in advance and I await your replies.

paddyrg

It is always better to pay less interest! The question is can you get the cheaper loan whilst you have the outstanding finance (the lenders don't know you're paying off another loan, you could blow it on the dogs for all they know, so it is seen as *additional* borrowing at loan time). If you could get the lower rate loan, and pay it off over a shorter period ideally too, you could probably save a few hundred quid overall. Only thing to watch is if arrangement fees wipe out the saving, and if you can get that low rate.

telboyo

8.1k over 3 years at 7.2 will cost 251. saving 9 gbp per month paying a total of 9k

drew2k9

seems more hass;e than it is worth to be honest! i think you are better off paying the way you are now. or could you afford to pay more per month? maybe discuss with the finance company that you would like to shorten the loan term and pay off a bit more? should save you a penny or two?

yorkshire-lad

To be honest,I think you will be very lucky to get the advertised 7.2% apr,your credit file will need to be squeaky clean.

A loan of around 8k will probably be around the 10% mark if not higher IMO.

I'd just stick with it if I was you,look after the car,keep it serviced,it's a BMW so will keep going and will keep it's value better than most cars.