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Refinancing / repaying a loan early and avoiding fees!
I just thought i'd share this little tip for anyone who may not be aware as it has saved me a few hundred quid in fees and about £25 a month.
The EU rules changed late last year meaning that you can make overpayments to loans without fear of penalty.
The upshot is that you can repay or refinance taking out a cheaper loan, repay most of it, then later pay off the small remainder only paying an interest fee on that tiny amount.
I had a loan with 9,300 outstanding with barclays with 8.9 %. I called them and asked if they could make it cheaper, and they tried pushing me into accepting a new loan at 17%!!
I swiftly looked at alternatives and found Nationwide were offering one for 6.6 % and was accepted for it. Received the money, and paid off all but £10 of my Barclays loan.
Called up the following day, and paid off the remaining tenner to achieve a near fee-free refinancing of the loan. It is saving me about £25 a month having the cheaper loan too so definitely worth thinking about if you currently have an expensive loan and thought you were stuck with it.
The EU rules changed late last year meaning that you can make overpayments to loans without fear of penalty.
The upshot is that you can repay or refinance taking out a cheaper loan, repay most of it, then later pay off the small remainder only paying an interest fee on that tiny amount.
I had a loan with 9,300 outstanding with barclays with 8.9 %. I called them and asked if they could make it cheaper, and they tried pushing me into accepting a new loan at 17%!!
I swiftly looked at alternatives and found Nationwide were offering one for 6.6 % and was accepted for it. Received the money, and paid off all but £10 of my Barclays loan.
Called up the following day, and paid off the remaining tenner to achieve a near fee-free refinancing of the loan. It is saving me about £25 a month having the cheaper loan too so definitely worth thinking about if you currently have an expensive loan and thought you were stuck with it.
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Comments
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just one problem with this,very few people will qualify for a lower apr today than they did a few short years back0
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It all depends. When I took my original loan out 8.9 was the cheapest available on the comparison sites where as there are now much cheaper options out there. If I can do it i'm sure a lot of other people can.0
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I'm in a similar position at the moment. I have a loan at 11.55% APR but have been offered a new loan with another lender at 6.4%. The settlement figure I received includes 58 days interest so am I correct in thinking I could potentially save myself this interest by doing the following -
Make a loan overpayment on my current loan leaving £10 and then call up a few days later and settle the £10 thus only being charged 58 days interest on the tenner rather than the full amout?
Thanks0 -
how did you pay your barclays loan? Cant see online where it lets you. loan is from 2010Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.0
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