First Direct Loan advice please

*Kat*

I need a loan, I need £3,500.

First Direct offer me a £3500 loan at 16.9% APR, I would take this over 3 years, so my total repayable: 4,414.34 - total interest payable is 914.

However, if I get a loan for £7000, it reduces the interest rate to 7.5%. Over 3 years, total repayable: 7,814.59 - total interest payable - 814.

I am considering taking the £7,000 and then repaying early, could I possibly make a bit more saving if I repay it sooner?

What do you think? I will put the remaining 3500 in my account and use that to make the monthly payments, or should I pay it back off the loan in one go?

Thanks in advance

DCFC79

First of all is it definite you could get the 7.5% for the larger loan ?

I believe what your thinking of doing is possible, I'm pretty sure others have done it on here, might even find some posts about it if you use the search option.

ViolaLass

And would there be any penalties for overpayments?

Nebulous2

ViolaLass wrote: »

And would there be any penalties for overpayments?

If it is a personal loan, then the penalties for overpayment are limited to two months interest. Still very much worth doing in most cases.

Companies vary in whether they penalise or not - read the small print!

*Kat*

Terms say:

Where you make any early repayment, there may be a reduction in the amount of interest you will have to pay. We are entitled to defer the early repayment date by up to 28 days and make a charge equivalent of one month interest on the amount of the early repayment.

That's all it says in relation to early repayment

JimmyTheWig

If you make an overpayment on a personal loan, do they reduce the amount they take each month?

[Deleted User]

No - it remains the same, but the term shortens.

JimmyTheWig

In which case, OP, you need to be careful that you don't commit yourself to repaying too much each month.

Would it make more sense to take the £7000 loan over twice the number of years that you would take the £3500 loan for?

Caz3121

post #5 - you have quoted something to do with First Direct mortgages which is not relevant to this post as OP is asking about a personal loan
Unsure if you have posted this on the wrong thread or are just spamming to get post count up!

[Deleted User]

Good old Andrewjack is our early morning spammer. Lots of vaguely relevant posts copied from other sites to overcome his lack of English skills.

Yet to see what he's selling though. Given he only seems to post on the loans board, I'm hoping for fake Nigerian loans.

Nebulous2

Deleted_User wrote: »

No - it remains the same, but the term shortens.

Not necssarily. They may ask you to choose. I believe some companies will reduce the payment automatically.