Loans

luckylouise08

Hello, Looking for some advice. I am not too savvy when it comes to loans. My old car was going to fail its MOT and needed £700 worth of repairs at least so i decided to buy a car on finance by getting a loan with Ford Finance at the Sky Ford showroom. My car was £7600 and my loan hits around the £9000 mark with interest and charges etc.

I want to pay my loan early. I have worked out that i could pay it off definately within 2 years (the loan is a 4 year one) and Ford Finance do let you pay early and it becomes cheaper but you have to get a quote of how much the loan will be if you pay early which i am not too familiar with.

I wondered if i could take out another loan, with a better interest rate and shorter payment term to pay off my car loan right now but i am a bit confused with information i have read on the internet. Is it possible for me to get a loan to pay off a loan if i choose a different company eg my bank or other financial company offer loans?

Sorry if i am being a bit thick, some financial products i cannot get my head around!

My credit rating should be very good, i always pay my rent on time, always paid cable tv on time in my name, always paid my phonebill on time, im on the electoral roll, i always pay the full balance of credit card payments, never use an overdraft.

Please help!

Thank you!
Louise

Tixy

You are allowed to get a loan to pay off your car finance. But it might well come down to whether you can actually get accepted for a loan and at what APR.

What is the APR on the car finance? When did you take out the car finance?

What credit cards do you have? what are the total credit limits?
What other debts do you have?

Your rent payments do not show on your credit file, your cable TV & phonebill might also not show. Have you actually looked at your credit file?

luckylouise08

Tixy wrote: »

You are allowed to get a loan to pay off your car finance. But it might well come down to whether you can actually get accepted for a loan and at what APR.

What is the APR on the car finance? When did you take out the car finance?

What credit cards do you have? what are the total credit limits?
What other debts do you have?

Your rent payments do not show on your credit file, your cable TV & phonebill might also not show. Have you actually looked at your credit file?

Not sure of the APR on the car finance i will have to check. I took it out rather frantically and then regretted not thinking it through enough and shopping around.

1 credit card, limit of £1300 a month.

Do not have any debts at all.

I tried to obtain a free trial credit report but the company could not provide it in time during the free trial and i did not want to pay for it. They wanted to know so much information on me and when i sent it back to them they did not give me access to my report during the trial so they wanted money from me. At the moment i do not wish to pay for a credit report but i will in the near future. I would like to pay off my car loan so i can get savvy with money and look at getting a mortgage in the future.

Thank you for your help so far.

Louise

Tixy

In future I would suggest you apply for the £2 statutory credit report - if you apply by post generally its not so much hard work to confirm your identity to them.

But find out the APR on your car first. Often personal loans are more expensive that secured car loans but it depends on what you are currently paying to start with.

luckylouise08

Tixy wrote: »

In future I would suggest you apply for the £2 statutory credit report - if you apply by post generally its not so much hard work to confirm your identity to them.

But find out the APR on your car first. Often personal loans are more expensive that secured car loans but it depends on what you are currently paying to start with.

The APR is 12.7% and the rate of interest is 5.4% per annum i took the loan out in late feb 2011 it started taking payments from my bank account on april 1st (april fools day funnily enough!)

I think i may ring ford credit and see what my settlement quote would be if i paid now.

Then see if i can get a better loan to cover it.

Louise

luckylouise08

Tixy wrote: »

In future I would suggest you apply for the £2 statutory credit report - if you apply by post generally its not so much hard work to confirm your identity to them.

But find out the APR on your car first. Often personal loans are more expensive that secured car loans but it depends on what you are currently paying to start with.

Got my settlement quote off ford it is valid until the 18th july the whole amount i owed including interest and charges was £9568 but my settlement figure is £6932.70 i have paid out £1059 so far into the loan from april till now. Is this a good offer for me? Your opinion would be very much appreciated.

Thanks louise

London_Saver_2

Is anybody being granted a loan these days? Serious question.

iolanthe07

12.7% APR isn't too bad these days, tbh.

Dandydon83

Hi Louise

I believe that if you pay off the loan total minus 1 months loan repayment (instead of paying off the whole lot)then you wont get charged the early settlement fee as technically you're only making an extra payment.

I'm not 100% sure about that so maybe somebody else could confirm.

As above, I'd say 12.7% is quite good nowadays

chieffy72

The good news is that the new consumer credit directive kicked in on 1st Feb 2011,there's all kinds of new legislation but one of the changes that will probably benefit you is that you can now make partial payments to reduce your monthly payments at any time rather than have to save up for months/years and pay it all off in one go. More info here:http://www.moneysupermarket.com/c/news/the-consumer-credit-directive-what-does-it-mean-for-you/0010789/
Scroll down to the "Cooling off period and early repayments" paragraph.

Keith.

ViolaLass

luckylouise08 wrote: »

The APR is 12.7% and the rate of interest is 5.4% per annum

What does this mean?