Nationwide personal loans

charleyroo

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Hi all

Well, I know that Nationwide do a 'soft search' when you are shopping around for a personal loan so I thought I'd have a look because I'm considering changing the car in the new year and weighing up whether to get something fairly new or a banger to see me through for a while.

This is what it came up with;

New Loan - £7,500.00 New Loan Loan Amount£7,500.00 Term24 months Loan Interest Amount£686.64 Total Amount Payable£8,186.64 APR8.9% Monthly Repayments£341.11
I'm 22, own my own home (6 months in), earn £27k and put away around £800 a month for housey type projects/holidays (which is why I don't have any fantastic savings to hand at the mo) No debt, pay my cc and Next acc in full almost every month (approx £250 outstanding this month due to my stupid abroad phone bill!).

First question - can you overpay loans? I do save in a sharesave, the first one comes out in August this year (£2.5k) which is why I ask if you can overpay - I'd be looking at splitting this half to pay some of the loan and siphoning £500 a month into my mortgage (max allowed) for a few months also. I can also put as much as I want towards the loan out of my (or our, lol) remaining spare £800 per month)

Second question - by committing myself to a loan will I be harming myself when I fix my mortgage again in 18 months? I suppose if it was a big deal I could just overpay like crazy.

I would consider borrowing less than £7.5k but as far as I can tell it ends up costing you more.

Third question - not sure if my flex account holder status was taken into account when applying.... can they get this automatically from my details or is it worth phoning to check (to get the 6.9% if, of course, it's available to me lol)

I am a bit scared of having a loan, I suppose, hence all the questions - it's not so much the debt, just I haven't had a loan since I was young(er) and silly(er) and I rather liked being debt free. The only thing is, my car is almost on its last legs and I hate being forced into buying things last minute when things go wrong, I'd rather know what my options are in advance!

Looking for a bit of discussion here, so any advice or pointers are well received! I know saving is another option - in my head I know I'm being a bit 'well, if I can have it now rather than saving for 2 years then why not' but the other bit of me is a bit more sensible

Cheers!

charleyroo

Just to add - I have considered a 12 month loan but if I can overpay, I like the flexibility of being able to pay off lots then if an emergency comes up I have the freedom not to also!

tonycottee

charleyroo wrote: »

I'm 22

just I haven't had a loan since I was young(er)

How old were you? 12?

Seriously though, if you're scared of getting a loan and don't need one - don't get it.

Dabooka

It would affect your mortgage as your commitment to debt would be greater compared to your wage.
Also, as you're buying a car, make sure you budget not just the loan but insurance, fuel etc. It soon starts to rack up! Seriously, sit down and work out the cost of ownership.

Finally, the headline rate might not be what you get offered (as you mentioned) and a lot of loans don't allow over payments, just early settlements. You need to check.

Personally, I'd save up a month or so and buy a runaround again.

charleyroo

tonycottee wrote: »

How old were you? 12?

I was 18! lol. I took out £1,900 with my bank for a car at 17% APR - utter madness I know, and learned my APR lesson pretty quick - and realised how rubbish that was, sold the car and lent some cash from my dad to buy a much cheaper car (all paid off!)

Tending to agree with both of you (before I change my mind again!) - things are pretty good at the moment, with not having any commitments, we can be prepared for any bad-type life events that come our way. It seems silly to commit to something that isn't a necessity at the moment.

I've been doing all the sensible calculations, comparing several mortgage calculators with my commitment to debt now, and then with the loan - although the Nationwide one says 'excluding any loans with less than 6 months to run'. In theory, they don't seem to lend me too much less (and still nowhere near as little as I actually have on my mortgage - but I know until you get it on paper it's worthless.)Insurance would be around the same, fuel maybe slightly less.

My original plan was to get some saving done and re-evaluate in the new year. It would take me between 9 months and a year to save up the same amount depending on how much I put aside for other things, without taking into account my share saves. I can only imagine the satisfaction of saving all of that money!

Lots of thought needed (am swaying the correct way at the moment !)

Thanks both.

charleyroo

Hi all - well, just to follow up (and balance things out in my mind).

I played around with the Nationwide offer calculator (after the soft search) and if I selected 36 months, the APR came down to 6.1%.

I spoke with Nationwide and they offer unlimited overpayments - so I could have my loan for 6.1% and pay it off as soon as I want. I can afford £900 a month in payments, but decided to go with around £800 (£245 of this is the standard payment) and double my overpayments on my mortgage to £200 a month as a 'concession' to my conscience.

If it takes me 12 months to pay it off (obviously should take less, around 10 months or so) if my calculations are correct, I should pay around £200 in interest. Conversely, the old car will cost me £160 this month in car tax, at least £150 for the cam belt when I hit 60k miles before Xmas, I need 1 new tyre and I'm expecting the other 2 coils to go (I've had one go every other month since Aug, at £50 a pop). Granted, I'm biased towards having a lovely new car, but if I save for it, I have to pay out for this car in the mean time, whereas if I take out a loan I obviously have to pay interest.

I'd like to think I'm fairly sensible with money and it's this sensible-ness that has probably been worrying me. As secure as my job is, and my OHs too, you never really know what is around the corner. I have emergency savings tucked away that I don't even acknowledge and try to never consider when I need a little more cash for something, so committing myself to overpaying a loan rather than getting more savings should be ok. I will need to make sacrifices though, namely a new bathroom, starting to save towards a wedding and an extra holiday this year (who needs holidays anyway?)

I've also played around with the Nationwide mortgage affordability calculator and the lower minimum payment of £245 x 36 months has upped their suggested, theoretical affordability to £89,000 (I will need around £70k) even so, I don't have any intention of having a loan in 18 months when I fix again so it should be taken out of the equation.

So, I've tried to consider everything I possibly can when deciding to have a loan. Maybe I should have this thread moved to the DFW board and get working on my overpayments (I'm raring to get started on them - although, I haven't had the paperwork through for the loan yet, I have set aside some money towards my first overpayment!)

Thanks for your advice though guys.