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Can I get a bigger loan and use some to pay it off early?
Cookiepops
Posts: 377 Forumite
in Loans
I need 5k for a new car but the rates are higher than for 7.5k loans. The repayment for 3 yrs on a 5k loan are the same as 5 yrs on a 7.5k loan. So, if I could get a 7.5k loan for 5 yrs, put 2.5k into a locked ISA for 3 yrs, then use it to pay of the loan in 3 yrs time? Is it do-able?
Thanks
Thanks
:heart2: Cookiepops :heart2:
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Comments
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Yes but it might be better for you to repay the surplus now instead of at the end as the interest charged will be higher than you get on the ISA.0
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Same as what I was going to say. Only if your ISA account will give you more interest than you will pay on your loan (which is pretty unlikely) then go for it. It's important to look at the final amount that you will pay rather than monthly payments.Save in 2013: #166: 9,122.51/[STRIKE]5,000[/STRIKE] 10,000Interest earned in 2014: £257.61 20/04/140
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