Car finance advice - zopa loan?

pilnet101

Hi all,

I just wanted to check whether or not taking a loan from zopa is the best thing to do in my situation here as their business model seems quite watertight and their website is quite user friendly.

I am looking for a new car in the region of around £16k. Once I sell my current car (after getting the new one) - I am hoping to get around £7-8k. On top of this I am getting £5.5k mid next year due to personal circumstances. I was thinking of taking out a £16k zopa loan now in order to buy the car, over a period of 5 years to bring down the monthly payments - this will be around £290 per month which we can do (£17500 total with interest). Then once the additional money comes in from my current car and from what I am getting later on next year, I will use this to pay off a bulk of the loan, leaving me with around £10k left of the initially (after paying off the £7-8k bulk after selling my current car) and then around £2700 left of the loan (after paying a good few months of it next year and then the £5.5k bulk).

I suppose my main questions are - am I right with the above? Can this be done and then I would be effectively left with a £2700 loan mid next year to pay of over 5 years? (around £53 per month then)

As well as that, does this sound like a viable route to go down for financing a car? Or am I going at this the wrong way entirely!?

Thanks a lot all help appreciated

[Deleted User]

Your monthly payments won't reduce after paying off a lump sum. The term will shorten.

On, and click spam on andrewjack, our overseas early morning spammer, please.

pilnet101

Ah - thanks zx81, that's a great help. Bit of a shame it's that way in one respect though, but makes sense.

Thanks, his post did seem a little dubious!

27col

Nothing wrong with a Zopa loan if you can get one. Their criteria are quite strict. Rightly so, in my opinion, as it is my money and that of others like me, that they are lending.

Ewe

Pilnet & zx81 - Zopa do reduce your monthly payment and keep the term the same if you make an extra repayment. I've done that a couple of times with a loan I had with them recently and my monthly payment went from £100.57, to £90.25, to £88.25 each time I made the extra payments.

I have nothing but praise for Zopa's customer service, extra repayments are easy to make and they have a full settlement figure easily accessible should you need it.

pilnet101

Thanks 27col - I did run MSE's eligibility 'soft credit check' tool for loans and they came up as most likely eligible so I am crossing my fingers.

@Ewe - Thanks for that piece of info, that changes the ball game entirely in respect to what zx81 said. With regards to your own experience with Zopa and early repayments, are there any caveats/conditions at all? Do you think I would be able to carry out 'my plan' as it were as per my OP?

On a side note I would like the point out that on the loan calculator on the zopa website, the APR is now jumping significantly on loans over 15k, I'm sure this wasn't doing this before a few days ago when I checked. Not sure if anyone knows why?