Lowering Loan repayments

swim55

Hi,
I was wondering if anyone could offer me some advice.
I currently have a personnal loan which i took out to pay for my car last year. I have found over the past year that i've struggled lots with my finances.
My loan was for £9,000 with monthly repayments of £236. my car has proved to be more expensive to run than previously thought - petrol is costing me roughly £300 a month to get to work and back (with the occasional junt to other places)
The loan currently stands at £7,680. I know that I need to get rid of the money pit that is my car, however to get the best possible price for it I need to wait until we have nice weather (Its a convertible and when the sun comes out the prices go up;))
I'm just wondering what any of you would suggest to help really? I was considering going to the bank (loan is with Natwest) and asking if they could extend the loan and therefore lower my monthly repayments, but I am aware this would end up with me just paying more back in the long run.
OR do I just hold tight, get the bus to and from work every day and wait till summer to sell the car (I can probably get £6,000 for it) then ask for a settlement fee from Natwest and just hope it is in the £6k area (does anyone have any experience of what early settlements are likely to be?) and then just start all over again and re-finance myself with a cheaper and much more economical car?
Thanks for your help in advance!

National_Debtline

Hello there.

Your bank may agree to providing you with a longer loan. Although this may reduce your instalments you could find yourself paying back a much higher amount in extra interest costs. Prior to agreeing to anything of this nature it would be vital to do your homework to prevent you from getting stung. Is it possible to seek further clarification that the credit agreement is a loan (it sounds like it is) - and not hire-purchase where the borrowing is secured on the vehicle (this sounds very unlikely in your case)?

The bus idea could work well. Selling the car in the warmer weather is certainly the thing to do! If you sale proceeds fall short of the outstanding balance you could see if the lender would accept a full and final settlement, this means that they would accept a lesser sum to clear the entire outstanding balance.

You may find completing a financial statement a useful process, this should be able to help you guage affordability - and to make a reasoned decision in relation to the vehicle. One thing's for sure getting the bus is likely to save you a lot of money!

Best wishes,

National Debtline.

swim55

Thank you for your advice, much appriciated!

[Deleted User]

no lender will except a full and final UNLESS you have defaulted on the loan,to suggest this is so is misleading