transferring car finance??

Rosie515

My partner brought a car at the start of this year (2016) on finance, the APR of the finance is 15.9% (which I know isn't as high as some but it's high enough) and we would like to reduce this in some way if it is possible. We own our own property which has no mortgage on it and we have never had a mortgage. We went into a bank and asked for a little information on if there was any loans that we could take out to pay off the finance company in full and then pay a lower APR back so in theory we would pay back less money (and hopefully over a shorter time period) the bank gave us some figures for a personal loan but the APR was higher than what we were told it would have been by another member of staff so we are confused on this. The bank also suggested about us taking out a mortgage against our property as the settlement figure if we pay the finance now is only £10,500. We aren't sure if this route would be a good idea as we would like to still be classed as first time buyers in the future if we decide to move house and need a mortgage in the future.
Please can anyone offer any advice on how we could achieve a lower APR rate and which route would be more suited to us in our situation?

Thanks

DCFC79

Did the first member of the banks staff say the rate was the representative rate of x % but once a search was done you were offered more.

Rosie515

Erm I can't remember what she said exactly tbh, it's an offer that natwest are doing that the APR was 3.9% but when another woman went through it on the computer it was 13.9%!!

forgotmyname

Save up and pay it off early or pay a lump sum if you can?

But do check all charges first, probably not much point in paying it off early if they save you save £200, but they add on admin charges of £201.

Rosie515

we are paying £260 per month for over 5years so if we pay that we pay £17,000 in total but if we can pay it off in a settlement figure now it's £10,500 and surely if we have a loan for this amount we would pay less than £17,000 in interest of that?

aphill24

Have you tried to get a loan at a cheaper rate? First Direct offer loans at 3.4% The answer to paying less interest is shopping around for the best rate. Taking a secured loan against your house is risky if you were unable to keep up the payments. You never know what's around the corner regarding ill health or unemployment so I would shop around for the lowest rate you can get and work out if it's cheaper in the long run.

SeanG79

Mortgage for a car is not the usually the best option, firstly because you are securing a loan against your property for a depreciating asset. Secondly, if you could end up paying for the car for much longer than 5 years. Thirdly redemption fees could end up more than the interest saving.

I would suggest trying another lender and if its not cheaper overall, rather try overpay on the current agreement, which will reduce the total amount of interest you pay.

downhillfast

For £10.5 k I'd be tempted to try to fund it using a 'money transfer' credit card (or 2). This would cost you a one off fee (1-3% depending on which card)

http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs

foxy-stoat

You should be able to get a loan for around 7-8% if your credit history is very good which would save you about £5,000.

If you have no mortgage, no other borrowing then your credit history will not be so good so you may struggle to get a decent rate.

I would look at one other lender to try and better the rate, put in a car purchase rather than clearing an existing debt, techincally not correct but if it was me I would do this.

tonyh66

your paying about £4500 interest on the original loan,if you can get a loan for 4% you will save about £3000. I guess that you have no credit history or have some debt already or your income is not sufficient to cover another loan, hence the higher interest rate from Natwest.

andyfromotley

This is a HORRENDOUS suggestion. Turning an unsecured loan into a loan against the property that you love in is truly terrible advice. I am surprised they even suggested it to be honest.

No No No. Do not do it.

shop around for cheaper loans. Use the eligibility checker on the MSE site as a rough guide.