1 New Loan or 2 Old Ones

sm1979

Morning,

I was wondering if it would be wise to take two old loans w/ 11.7% & 13.3% APRs and replace with a single new loan with an APR 6.8%? Did a soft search and was offered this rate with a major high-street lender.

Old loan 1 - 28payments left @ £218
Old loan 2 - 28payments @ £220 + final payment of £417 (car loan)

New loan - 28payments @ £402

I intend to take out the new loan for the amount outstanding without additional borrowing. I am looking to reduce the monthly outgoings whilst trying to save on the overal cost of servicing the existing debt.

Any advice would be appreciated.

Tixy

If you were able to get that loan at that rate then it would certainly work out cheaper overall.

Have you obtained settlement fees for the 2 existing loans to check that the amount you are borrowing will cover them?

sm1979

Thanks Tixy, I thought as much.

I have the settlement for the loan, as it is through the bank they show the amount outstanding without the interest front-loaded, and the car settlement I have worked out using the DualCalc program from the OFT. Obvisously have to confirm but I dont think it is that far out.

redpete

sm1979 wrote: »

Thanks Tixy, I thought as much.

I have the settlement for the loan, as it is through the bank they show the amount outstanding without the interest front-loaded, and the car settlement I have worked out using the DualCalc program from the OFT. Obvisously have to confirm but I dont think it is that far out.

Trouble is the 'amount outstanding' might not include any fees they would charge if you paid it off early, unless they explicitly say that it does include this.

Not sure what you mean by a 'soft search' - but is this definitely what you would be able to get from that lender rather than a 'representative rate'?