Reasonable Loan rate?

Jools07

Borrowing: £10,000
Term: 5 Years
Total repayable: £13,600

That's about 15% APR isn't it? Is that reasonable for a low earner (£12k)

Phoenix79_2

I reckon 13%? Only worked it out very roughly. I'm sure an expert will confirm the exact figure.

To be honest thats high unless you have a bad credit history. I had a loan for £10k when i was earning £12k pa and that rate was 8.9%. It was from my own Bank.

Who is your loan with?

pknottm

A good rate at the minute is with the moneyback account (5.7%)
http://www.moneybackbank.co.uk/home.html

It's also worth reading the article about loans, etc:-
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1099314935,42333,

A £10,000 loan over 5 years at 5.7% will mean a monthly payment of £191.45 per month (total payable £11,487.00), without payment protection.

Hope this helps!

Robert_Sterling

Jools07 wrote:

Borrowing: £10,000
Term: 5 Years
Total repayable: £13,600
That's about 15% APR isn't it? Is that reasonable for a low earner (£12k)

A rate of interest is a rate of interest.
It does not depend on how much you earn.
It does not depend on how tall you are.
It does not depend on your age.
It is what it is.

If in fact the APR is given as 15% then it is high compared with 5% and low compared with a store card with APR 25%

dazza190574

I worked it out at about 6.8% but I could be wrong.

At 15% it would cost £17,500 to repay.

A £10,000 loan with repayment of £13,600 sounds quite good, but do shop around.

Phoenix79_2

a 6.9% rate loan for £10k over 5 years would cost this according to Natwest:

APR 6.9%
Monthly Repayments £196.75
Total Amount Payable £11,805.00

I guess if PPI is included it could inflate the figure

billymac

Jools07 wrote:

Borrowing: £10,000
Term: 5 Years
Total repayable: £13,600

That's about 15% APR isn't it? Is that reasonable for a low earner (£12k)

I calculate the APR on this to actually be 23.4% which is ridiculously high.

As pknottm has said above shop around; several companies are offering loans with an APR of less than 6% just now (e.g. Northern Rock, Alliance & Leicester, MoneybackBank). However, bear in mind that with the current inflation pressures interest rates may increase again soon which could could push these rates up, at least in the short term.

Phoenix79_2

I'd try your own bank first Jools07