Removing loan protector

molar

Hello,

I have a loan which was originally for £5050 at 8% APR. I think the term is around 48 months but I don't have the details to hand. The amount includes loan protector which cost roughly £1050 (:mad:) I am currently repaying it at a rate of £103 a month of which £88 goes towards repaying interest (rule of 78 loan).

At the time I dont think I was made aware that cancelling loan protector would involve repaying the loan early and setting up a new one. I've been repaying the loan for around 8 months now. The company told me the rebate for cancelling loan protector would amount to £870.

My question is, would it be cheaper for me to stick with the current loan or take the £870 and start a new one? I have read that its more expensive to repay the loan early due to the rule of 78. I'd also be hit by a penalty of one months interest and then be starting a new loan for the same amount less £870.

Thanks for your help.

Xbigman

What APR are you paying? If you can get the same APR or lower you can cancel and save money. If you get lumped with a higher APR then don't cancel, its unlikely to be worth it.
Regards



X