RBS want to make my loan better for me???

Leli72

Hi all
Wondering if anyone has any advice on this:
I took out a personal loan with RBS a few years ago for £20,000 I have never missed a payment and was fortunate to be able to pay £10k off it about a year ago. The balance now stands at 6k.
The interest rate on the loan is 13.5% and I have 20 months left, however RBS keep contacting myself and my partner saying if we borrow an additional £1000 they will move the loan to a lower interest rate 6.5% - our term will stay the same and we will only pay back an extra £13 per month which over 20 months is £260 so in effect we would get £740 for "free"
Anybody else ever heard of this or could advise what they are playing at as the banks never give you something for nothing!!
Any advice or opinions would be gratefully received
Many thanks
Leli

[Deleted User]

Sounds a good offer.

PeacefulWaters

Leli72 wrote: »

Anybody else ever heard of this

Yes.

what they are playing at

They are trying to achieve their lending targets. Making you better off along the way.

as the banks never give you something for nothing

I spent a long time working in a bank branch. A huge amount of what I did was talking to customers and moving their money to better paying savings accounts, cheaper loans and mortgages or cheaper home insurance.

Any advice or opinions would be gratefully received

Check the numbers work for you. Lower monthly payment? Less interest charged? If so, go for it.

Fruit_and_Nut_Case

If you don't actually need the extra £1000 why not check if you could immediately use it to make another early repayment without penalty.

PeacefulWaters

Fruit_and_Nut_Case wrote: »

If you don't actually need the extra £1000 why not check if you could immediately use it to make another early repayment without penalty.

Sometimes the obvious is staring us in the face and we miss it.

So simple it's brilliant.

[Deleted User]

When they say your term will stay the same, do they mean you will still only have 20 months more to pay, or that you will start back at the original number of payments?

Leli72

Hi guys
thanks for the response!

It just seems to me that this offer seems to good to be true! And is out of the blue, I just cant see what's in it for the bank
Unless it is just so they can hit a sales quota

I had already thought of just paying it back off the loan and there by reducing the term further

The term will stay the same e.g still 20 months left not go back to the original 7 year term!

Thanks again

Leli