Paying off Yorkshire Bank loan

fayraz

Hi,

My sister took out a loan for £11,000 with YB at an APR of 7.9%, but I was just checking on MoneyExpert that I can get a loan with Northern Rock for the same amount but with 5.9% APR.

Shall I tell her to take the loan out with NR and pay off the remaining debt with YB, is it worth it and if so how shall I go about doing this?

Thanks.

Xbigman

The fact you can get a loan with NR at a low APR does not mean that she can. Are there any settlement fees or charges involved in paying off YB? If there are it would wipe out any savings. Was PPI sold with her current loan? If there was she will probably not get it all back. If there wasn't PPI, then was *your* low NR quote dependent on taking PPI?

All that said, it could *just* be worth it. The only way to really tell is to get a settlement figure from YB and then your sister applies for a loan from NR and you compare all the figures (not forgetting that if she has a made a few payments she has already paid some interest on the same money she is borrowing again). Also remember that multiple loan applications will hurt her credit rating.

Personally I wouldn't bother.
Regards



X

fayraz

I know she had insurance with the loan and asked YB if they could cancel it and they said the loan is over 30 days old and cannot be cancelled.

Xbigman

Now you have said that I can virtually guarantee she will not save money switching loans.

To be honest, the biggest saving she could make would be to not take the PPI in the first place. I'm not being harsh, I learn't the hard way too .

As for cancelling PPI, read through the threads on that subject on this forum. There is one called 'cancelling PPI can be done...' She might still be able to cancel.
Regards



X

fayraz

Thanks I am just looking at that thread now.

Phoenix79_2

fayraz wrote:

Hi,

My sister took out a loan for £11,000 with YB at an APR of 7.9%, but I was just checking on MoneyExpert that I can get a loan with Northern Rock for the same amount but with 5.9% APR.

Thats the 'typical' rate. Doesn't mean thats what will get offered. NR have a habit of advertising low rates and actually offering high ones once you apply! I applied for one at 6.9% years ago......was offered something over 10%! Needless to say I never took them up on the offer.