Help with Natwest loan..

Diana_Prince

Hi all

I currently have a Natwest loan which has 36 months left to pay @ approx £280 a month, 20% interest (I know I know, but it made me a lot better off than I was before). Outstanding balance is £8101.

My question is do I carry on paying this or do I take out a new loan (a better interest rate) and save myself some money in interest??

Your help is appreciated!

jonesMUFCforever

What do your credit files show? - Are they squeaky clean?

Try your bank first as they will arrange to repay their own loan before lending you any more money.
If you go to another lender they have no way of making you repay the first loan so in theory you could be doubling your debt.

Tixy

Hi

Depends on whether you can get a new loan and at what APR.

To settle the loan early you will have to pay early settlement interest. If that is less than the overall interest rate saving from moving to a cheaper loan then yes it will be worth it.

Would you plan to still pay around £280 a month? so take out a loan over a shorter term than 36months?

Diana_Prince

Thanks for the replies. My credit file is all good now, "squeaky clean!". I can get a market leading loan. I'd like to pay less a month so that I've got an extra bit to put back for emergencies.

Tixy

Well if you are able to get a market leading loan and at the representative APR then it sounds like a no brainer.


At say 4.5% APR over the same term you'd be saving over £1000 in interest.

longtermplanner

A new loan at a lower interest rate is indeed a no brainer and will reduce your monthly payments.

Try not to extend the term of the loan though as although that will reduce the monthly payments even more, it may mean that in the end you are paying more interest.

gb12345

Diana_Prince wrote: »

I can get a market leading loan.

Has someone actually told you that or is it just an assumption?