Top up Loan or New loan

[Deleted User]

Hi!

I will be purchasing a car imminently and I had two options to use and I was wondering which one was most likely or better to use.

I currently have a Nationwide Loan that I have almost paid off (40months early after only 8). I need to get a loan for a new (used) car purchase.

I am not sure which option is best with regards to a loan, do I:

Top up my current loan for the amount needed and then continue paying (at the normal rate).

Or do i pay off my loan and then take out a new one straight away?

Please don't tell me to get neither and save - I know thats an option and I have other reasons not to!

Apples2

If you must insist on paying more of your money by way of Interest then that's your choice.

The choices in your question depend on the Interest rate. If topping up your current loan has a lower interest rate than a brand new loan, there's you answer.

This assumes you will fit the criteria for a new loan but you haven't given any info to comment.

Consider though that most replies will be about paying no interest or if you have to, the absolute minimum but this system seems of little interest to you.

[Deleted User]

Apples2 wrote: »

If you must insist on paying more of your money by way of Interest then that's your choice.

The choices in your question depend on the Interest rate. If topping up your current loan has a lower interest rate than a brand new loan, there's you answer.

This assumes you will fit the criteria for a new loan but you haven't given any info to comment.

Consider though that most replies will be about paying no interest or if you have to, the absolute minimum but this system seems of little interest to you.

Not really - the interest rate is 5.9%, irrespective of new or top-up - pretty much the lowest you can go - When I can i will pay extra off, considering i have paid over £8000 extra off my current loan since June i will pay the maximum off i can.

I know i will fit the criteria for a new loan, so I'm not to worried about that, its just seeing which is the most sensible approach.

R_P_W

newbieboy wrote: »

Not really - the interest rate is 5.9%, irrespective of new or top-up - pretty much the lowest you can go - When I can i will pay extra off, considering i have paid over £8000 extra off my current loan since June i will pay the maximum off i can.

I know i will fit the criteria for a new loan, so I'm not to worried about that, its just seeing which is the most sensible approach.

Well surely makes no difference if costs are the same?

[Deleted User]

R_P_W wrote: »

Well surely makes no difference if costs are the same?

In terms of interest no - Sorry what i was trying to see is if there is a better way-out of the two - Is it better to top up or get a new loan when the interest rate is the same?

So would i be likely to get one more than the other or any aspect like that.

Mozette

From memory, if you apply on line then Nationwide show you a comparison between a top up and a new loan, for example when I was borrowing extra, because it was less than £7,500 it made much better sense to top up - ie pay off the original outstanding loan and have a new one for the full amount rather than borrow the extra as a new loan.

ch3101

newbieboy wrote: »

I know i will fit the criteria for a new loan, so I'm not to worried about that, its just seeing which is the most sensible approach.

In b4 OP doesn't get headline rate