Taking out a large loan just for the interest rate

andyhart44r

Quick question - an ironic one conidering i work for a well known high street bank - but seeing how tesco are doing a really low sub-6% rate, is the following possible:

I take out a loan of £15k (or the minimum amount needed to get beneficial rate), loan is agreed and paid out. I repay £10k immediately (incurring a 1% charge) and effectively have taken out a £5k loan at 5.7% (fingers crossed for that rate)

Thanks in advance

Voyager2002

Remember that the fee for repaying the 10,000 would be 100. I make that another 2 per cent of the 5,000 you want to borrow, so for your first year your costs will be nearly 8 per cent of the amount you borrow.

Couldn't you do better from a peer to peer lender?

dealer_wins

Also depending on the term your monthly repayments would be 3 times are large as if you just borrowed the £5000. (assuming the same term of the loan)