Can I renegotiate my loan?

rcotugno11

Hi all

Back story here is my boyfriend had loans all over the place and we consolidated these into one loan for one easy monthly DD (stupid bit was we were not paying interest and we now are).

OK - so 2 years ago we took a loan out with Natwest (my bank) for £8 000, paying back £212.87 pm for 5 years, total repaying around £12 000

We have met every payment taken no payment holidays. We can now afford to pay a bit more each month, will this enable us to renegotiate terms of the loan?

Thank you in advance.

somethingcorporate

No, you cannot renegotiate.

What you can do is a) over pay your current loan with the extra amount or b) take out a loan elsewhere on better terms (APR) and pay back your current loan with it.

What is your current APR?

jonesMUFCforever

somethingcorporate wrote: »

No, you cannot renegotiate.

What you can do is a) over pay your current loan with the extra amount or b) take out a loan elsewhere on better terms (APR) and pay back your current loan with it.

What is your current APR?

This might be incorrect.
The OP can certainly ask their bank if they are eligible for a cheaper loan.
As you state they can also apply elsewhere.

Gaz83

jonesMUFCforever wrote: »

This might be incorrect.
The OP can certainly ask their bank if they are eligible for a cheaper loan.
As you state they can also apply elsewhere.

They could, but chances are they wouldn't get one from the same provider.

If you had someone repaying a loan at (say) 8%, who had never missed a payment or gotten into any kind of difficulty, what possible benefit would it be for a bank to give them a loan at (say) 5% to pay this loan off?

DevCoder

Because if they push the term of the loan out longer than 5% could give the bank more profit then a shorter term 8% rate.

Also for liquidity purposes a bank could favour money in a longer liquidity maturity bucket even at a lower return rate although for the sums involved this probably wouldn't be the case.

chambta

Gaz83 wrote: »

They could, but chances are they wouldn't get one from the same provider.

If you had someone repaying a loan at (say) 8%, who had never missed a payment or gotten into any kind of difficulty, what possible benefit would it be for a bank to give them a loan at (say) 5% to pay this loan off?

It happens all the time.

It's in a lender's interest to offer better terms if their customer's financial profile suggests a stronger ability to repay.

The danger to the lender in terms of profitability is if they seek better terms elsewhere and repay it in full, they lose the debt off their books altogether.

jonesMUFCforever

Gaz83 wrote: »

They could, but chances are they wouldn't get one from the same provider.

If you had someone repaying a loan at (say) 8%, who had never missed a payment or gotten into any kind of difficulty, what possible benefit would it be for a bank to give them a loan at (say) 5% to pay this loan off?

Sorry but this is incorrect .
Loan rates are much cheaper for banks to finance now than say 3 years ago - so they can offer cheaper loans to customers and still make a profit.
(It is also a ''sale'' for advisers in the bank!!)

Customers who are struggling to repay might benefit in some cases as repayments would be lower.

somethingcorporate

jonesMUFCforever wrote: »

This might be incorrect.
The OP can certainly ask their bank if they are eligible for a cheaper loan.
As you state they can also apply elsewhere.

I guess it's semantics, I wouldn't call that renegotiating, that is applying for a new product as it would be applying anywhere else but it's certainly worth asking the question of the existing lender.

jonesMUFCforever

somethingcorporate wrote: »

I guess it's semantics, I wouldn't call that renegotiating, that is applying for a new product as it would be applying anywhere else but it's certainly worth asking the question of the existing lender.

Personally I would call it crunching - anything to get a 'new' sale.