Maybe daft question...

shandy1

Example.
Someone with an excellent credit history wants a loan for say £5000.
The APR for this amount is more than it is for a loan between £7000-£15000.

This someone would get a better deal borrowing say £7000 at the better apr, only spending the £5000 they need and keeping the rest there to pay off the monthly amounts, no?

Don't know much about these things but what am I missing?

Malky

Why borrow and pay interest on £2K you don't need? Surely you would be better off in the long run borrowing £5K with a slightly higher interest rate?

Or am I missing something?

shandy1

That's where it adds up then I guess! Just when I thought about it briefly it never made sense. Cheers for clearing it up!

CLAPTON

well what are the numbers?

you might be better off borrowing the 7,000 and then making an overpayment of 2,000 after a month.

shandy1

No numbers. Just thinking as I've noticed apr rates differ. That's what my original point was. I don't know much about loans and payments but have wondered if you borrow more it could works out cheaper.

opinions4u

It depends on the terms and rates involved.

Tell us term, rate and monthly payment for £5k and the same for £7k and there's a chance of getting an answer.

Not a daft question, just not enough information to answer it with.