Paying off a loan with another loan to get a better interest rate?

californiandream

Hi there,
Last summer I got a personal car loan from Santander for £6000. This is at 8.4% APR and I will pay 6521.28 by the end of the 24 month period I agreed. So far I have paid paid 1902.04 off of it and there is 17 months left at 271 a month. There is s settlement figure on the loan of 4410.72.

I was talking to friends in similar financial situations to me and they got a much better loan deal. I was wondering If I could get another loan at a better rate and pay that? How would I go about it?

Personal info: 26 year old male, 42k a year, no debts except this and around 3k in current account (emergency fund). Thanks!

[Deleted User]

In theory yes. But it depends on you getting accepted for a further loan.

YorkshireBoy

I haven't used it, but how about this?...

https://www.moneysavingexpert.com/eligibility/loans-calculator/

Or how about a 0% money transfer card instead from the likes of Virgin or MBNA? A sub 2% one-off fee (c. £88) gets you 24 months 0% interest.

Who do you bank with? Some banks (Lloyds/Halifax spring to mind) will give you an indication of likely APR/APR range for loans/credit cards in branch. Just ask them to swivel the screen round and show you your customer profile.

[Deleted User]

8.4% on a loan for £6k isn't bad, the best rates are for loans OVER £7.5k

californiandream

Thanks for this. It looks like im quite likely to be accepted on a 5% loan which is a win.
The other option is interesting..could I pay off a loan to the bank on a credit card?

boo_star

californiandream wrote: »

Thanks for this. It looks like im quite likely to be accepted on a 5% loan which is a win.
The other option is interesting..could I pay off a loan to the bank on a credit card?

It's rare that a financial institution will take credit cards for loan/credit card repayments.

You can certainly ask but expect the answer to be no.

YorkshireBoy

californiandream wrote: »

Thanks for this. It looks like im quite likely to be accepted on a 5% loan which is a win.

The bottom line, is that this loan for £4,400.00, over 17 months, will cost you £268.64 a month.

In taking out this loan, you'll pay a total of £166.83 in interest. The true cost of this loan is £4,566.83

http://www.whatsthecost.com/loan.aspx

So the interest is twice the cost of the money transfer card's fee at £88...for a 7 month shorter repayment period.

The card would also allow you to drop your monthly payments to £187 (or a lot less!)...as well as saving you £79.