Personal loan

MK55

Hi guys,

After my last car sadly passed away a few weeks ago I've been on the hunt. I've only ever bought cars for around £1000 before. However since both have died within 2 years I thought I would push the boat out being 22 I need a better car:j:j

I've found a nice little mini which I've managed to get for £4000 instead of £4800 so I went down to rbs today,who have approved it with an APR of 16% seems standard for a lower loan from what I've found on the net.

Whilst I was in branch they offered me £7500 with 6% APR, I am allowed early payments and will only pay 58 days interest if I finish early, my first loan so I was shocked. :eek::eek:

Question;

Will I be better taking £7500 and paying the extra £3500 a month or so back later and then pay my £4000 I need over 3 years which I planned but with a 6% APR

OR

Take the £4000 with 16% apr over 3 years.

Which will be cheaper? I plan on paying the loan off within 18 months but took it over 3 years to plan for budgeting.

Thank you:j:j:j

MK55

Anyone :-(??
:rotfl:

sparklefrog

Does the 7.5k loan allow you to overpay without penalty
Does the loan allow you to pay early.
Are there added fees for finishing the loan early (some charge a few months interest)

You would have to work out what you would actually be paying by finishing early compared to what you would pay for the smaller loan over its term


But I think the biggest question if the answer to the above is yes is , do you have the discipline not to be tempted by the extra 3.5k in your account and not find ways to spend it. Its very very easy to think you will leave it in your account just to have a buffer then find it frittered away on the latest 'gadget' or a bit of a splurge on a holiday or nights out and before you know it the 3.5ks gone and your left with a 7.5k loan on a 4k car.

Giarc1982

very easy

MK55

I'm definitely disciplined enough not to spend it. There is an early repayment charge of 58 days worth of interest if I finish early on both. So looks better think m going to go for the latter.

Thanks for your help!!!

Tixy

How much more are the monthly payments on the £7500 loan compared to the £4000 loan?

Have you checked what happens when after you repay a large chunk.
Do you have an option to reduce your monthly payments? or will it just reduce the term? If you don't have an option and the monthly repayment remain at the higher level - can you afford them?

pumpkinhead456

Take the extra money, wait until it has hit your account, phone them up and ask to make a lump sum payment.
They may offer to either reduce your monthly fee over the same length of loan or keep the higher monthly fee and reduce the loan term.
My girlfriend done this at the start of the year (all be it by accident, as she decided to buy a cheaper car but already had the loan). By law they must accept a lump sum payment with minimal charge :T