Taking a loan to pay a loan...

Mrs_A_2

Hi.

I took a loan earlier this year to fund a new car. I have no problems with paying the monthly fee to pay this back - however, I've noticed that there are now loans available with lower APR (this was my first loan so I went with my own bank for 'safety' of being authorised).

I'm wondering if its possible / worth it to apply for a new loan with lower APR (would mean changing from 8% to 6% if accepted) and pay off the existing loan, then focus on paying off the new loan which would be incurring less interest.

Could I do this with the same bank? Halifax seem to now offer loans at 5.9% for the amount I'd need (my current loan is with Halifax). It mentions 'if you want to borrow more' but doesn't say anything about taking out a brand new loan because their APR has gone down!

Any advice appreciated.

Thank you. :beer:

DCFC79

Mrs_A wrote: »

Hi.

I took a loan earlier this year to fund a new car. I have no problems with paying the monthly fee to pay this back - however, I've noticed that there are now loans available with lower APR (this was my first loan so I went with my own bank for 'safety' of being authorised).

I'm wondering if its possible / worth it to apply for a new loan with lower APR (would mean changing from 8% to 6% if accepted) and pay off the existing loan, then focus on paying off the new loan which would be incurring less interest.

Could I do this with the same bank? Halifax seem to now offer loans at 5.9% for the amount I'd need (my current loan is with Halifax). It mentions 'if you want to borrow more' but doesn't say anything about taking out a brand new loan because their APR has gone down!

Any advice appreciated.

Thank you. :beer:

Depends on a few things like your salary and if the bank thinks you can manage paying the first loan and the second 1, yes your intention is to use loan 2 to pay off loan 1. The Halifax is the best place to ask though, can't offer any other advice as not had a need for a loan.

jonesMUFCforever

It also depends on how much you want to borrow - the best rates are for loans of over £7500 and 5 years.

You did say you took out the loan THIS year did you mean last year?
If not and the loan has not been in place for 6 months then Halifax won't refinance for you in case they get accused of ''loan crunching''.

forgotmyname

The lowest rates are for those customers that do not actually need a loan.

Low risk gives you a low APR. Higher risk and it will increase.

Do not assume that you will get those rates. Try and pay it off sooner maybe?