Is First Directs cash back loan cheapest on market? 5.3%?

MattyNeth

I see FD offer 25% cashback on interest on completion of loan. A £5k loan means instead of repaying £5,535, you receive £132 cashback on completion.

Can anything beat their 5.3% equilavent APR?

Rafter

I think the way they have calculated their illustration is a bit deceptive.

By quoting an 'annual' rate of interest they are ignoring the time value of money and the fact that receiving 25% off your interest bill throughout the loan would be better than having to wait until the end.

I think the truly comparable APR is about 5.66%

Still makes it a best buy loan though as most are currently offering 5.9% as the best.

As long as you can afford the slightly higher monthly payments, and you get their typical APR then you should save yourself a bit.

R.

Typo

I got one of these loans a few months back. Pretty happy with it. I had wanted to extend my mortgage to cover various repairs & renovations, which seemed like a good idea given the huge increase in house value over the 8 years I've had it. But being self-employed without 2 years of accounts to show yet, I couldn't. (Thanks Nationwide...) I'm now borrowing it instead from FD at a fixed rate that competes with the steadily increasing mortgage rate :T

-James