Covering one 'loan' with another

RhysAC

Hi, basically I have a car on finance with Stoneacre. I have just over 2 and a half years left to pay at £310 a month.


If I clear off the finance (which will be roughly £6,000) with another loan I could get for £6,000 and spread the costs over the same time scale (2 and a half years), I could get a loan and pay only £212 a month due to far less interest.


Is it possible to do this and how would I go about it?

forgotmyname

Thats assuming the new loan is at a lower interest rate than the one your currently paying?

To save £98 a month in interest must be some rate your paying?

Old loan at 37% ? New loan at 4 % ?

Is your credit good enough to get a £6000 loan at 4% ?

How to go about it. Get a true settlement figure from the car finance company and then apply for a loan of that amount. If accepted then pay the car loan off.

Make sure you get the settlement figure first though.

Hazzinho

Will depend on your credit history and especially your salary. £6k outstanding plus the extra £6k you are borrowing is £12k, double this is £24k, you will need to earn over £24k or you will be deemed high risk, this is assuming you have no other debt.

jonesMUFCforever

Many lenders only give their best rates to loans £7500 and above and with an A1 credit rating.

thebritishbloke

jonesMUFCforever wrote: »

Many lenders only give their best rates to loans £7500 and above and with an A1 credit rating.

As a side note, it's probably actually cheaper to borrow £7500 than it is to borrow £6000. Just make sure you don't spend the extra £1500 if you don't need it, use it towards repayments.