Can i switch my loan to a more favourable interest rate

william_john

17 months ago I took out a loan with my bank for £25k over 5 years I still have £19k on this loan at 9% interest rate. I haven't missed a payment with this loan or with any others but have noticed loans at much better interest rates and was wondering if I would be able to swap to one of these loans instead, my current loan doesn't charge for early repayment. My situation has changed since I took out the loan and i'm now self employed and was employed when I took out the loan will this make any difference? Is it possible to change loan company? and how difficult is it?

[Deleted User]

You could apply for another loan. But I think your chances are slim, as you would be asking for a total of 38k until the second loan paid off the first.

Recent self employment could make it harder still.

william_john

Why would I need to apply for 38k? as I would continue to pay the original loan until I got the new loan and then pay the original off altogether and still have the 19k debt but with a lower interest rate.

[Deleted User]

You'd be applying for 19k. That, with your existing 19k, makes 38k.

The lenders needs to be comforatable you could afford the full 38k in case you decide not to pay off the first loan.

ViolaLass

william_john wrote: »

Why would I need to apply for 38k? as I would continue to pay the original loan until I got the new loan and then pay the original off altogether and still have the 19k debt but with a lower interest rate.

The new lender couldn't be certain that you would pay the new loan off so they would assess you for £38k of debt.

lee111s

You wouldn't be applying for a single £38K loan however, you'd need to apply to another lender and ask for £19k whilst still owing £19k on your current loan.


Unlikely unless you're a big earner.


Your current loan provider won't allow you to switch to a lower rate of interest. Why on earth would they do that? Would be a pretty poor business model!

DCFC79

william_john wrote: »

Why would I need to apply for 38k? as I would continue to pay the original loan until I got the new loan and then pay the original off altogether and still have the 19k debt but with a lower interest rate.

The new lender isn't aware you will use the loan to pay off the current loan, as far as they are concerned you will go out and spend it.

Might be different if the new loan was from the same lender but will have to ask them, might say no.

cakeforbrains

weejohn71 wrote: »

Has anyone had any dealings with Skye Loans,they took over secured loans from Black Horse ltd.My daughter was due to pay the last amount of her loan,a part payment of the usual amount,but was charged the full amount,an overcharge of approx £200.Four weeks later,after numerous phone calls,and no dispute about the amount she is still being fobbed off with various excuses.Anyone else dealing with this company?

You should start a new thread for a new question like this.

Herzlos

DCFC79 wrote: »

The new lender isn't aware you will use the loan to pay off the current loan, as far as they are concerned you will go out and spend it.

Might be different if the new loan was from the same lender but will have to ask them, might say no.

Some will do that, though they'll usually pay the loan off directly rather than giving you the money. Definitely speak to the lender of the original loan first though about refinancing it.

jonesMUFCforever

You could ask your existing lender whether you qualify for a lower rate on your loan.
This way they would pay off the old loan automatically.

Caz3121

from your other posts you also appear to have other significant debts I think you will struggle with anyone apart from your own bank, and even then I would think unlikely...existing £45k debt with wanting more newly self employed is a high risk for a lender