Paying off car finance (HP) with unsecured loan.

grant89uk

My partner has 48 months to go on a 60 month HP Agreement. It was only recently that I noticed the APR on the deal is >21%, I work away so was not home at the time the deal was agreed.

I have been recently looking at the current rates being advertised for personal loans, nationwide for example 3.6% for £7500+.

It looks to me like a no brainer that we would be financially better off over the term to pay the settlement figure with the loan.

However are there any pitfalls to this that are not so obvious?

I'm aware that not everyone gets the advertised rate but we are 99% sure we would get a rate <4.4% at the maximum.

Any input would be appreciated.

mlp

I agree - any APR less than the current HP is likely to be more cost effective. Check what the termination fees are on the HP though - likely to be £100 minimum.

andyfromotley

yup just crunch the numbers. Especially any penalties for termination of the contract etc (ring them for a settlement figure, they have to send a written copy too IIRC).

Seems an absolute no brainer.