Switching but new loan

Biollante21

Hello all
I have very recently got a loan from my bank which is Lloyds (literally have only made one payment) but after much deliberation and being told by Martin i have decided that i want to switch to a new bank to take advantage of the offers out there
Is this advisable with the loan being new or should i wait until a few payments have been made
Also, if i do switch, would i be better closing the account and setting up a DD to pay the loan or leaving the account open for the duration of the loan which is 60 months although i will be able to pay it back in less time

thanks for any replies and all advice is appreciated

John

YorkshireBoy

Biollante21 wrote: »

Also, if i do switch, would i be better closing the account and setting up a DD to pay the loan or leaving the account open for the duration of the loan which is 60 months although i will be able to pay it back in less time

You won't be able to do both if you switch for an incentive, as all require use of the CASS which will automatically close your old account.

If Lloyds is your only current account, and you've had it a long time, then consider keeping it open. If you want a switching incentive from somewhere else, then open another account (could be with Lloyds or anywhere else) and switch that one instead.

Biollante21

Thank you for the reply
I have just opened a Tesco account to take advantage of their 3% offer and was going to put money i save monthly in there to get a better return than i get with Lloyds
If i now open another current account elsewhere would this have any effect on my credit rating?
Sorry about the questions but i am new to all this

John

grumbler

Biollante21 wrote: »

...
I have very recently got a loan from my bank which is Lloyds

Biollante21 wrote: »

I have just opened a Tesco account to take advantage of their 3% offer and was going to put money i save monthly in there to get a better return than i get with Lloyds

You are likely to get a better return by using the money to repay the loan: Repay Debts or Save

If i now open another current account elsewhere would this have any effect on my credit rating?

The number of current accounts doesn't affect the rating, but a credit search recorded when you open a new account does have some effect, although minor and short-lasting: Credit Scores

Biollante21

Thank you for the links/reply Grumbler
I am one of those people who have never really had any savings and have lived on credit
These circumstances have changed with a surprise salary rise after i obtained the loan and want to save for a holiday
I see the reasoning behind paying off debts with savings but just for once it would be nice to pay for something without adding to the credit card bill

Biollante21

Another quick question
As i have just opened a Tesco current account for the 3% interest but realising that i wont get as much as i would if i do a switch would i be ok to switch that account and then close it?
Once switched is it easy then to set up new DDs with the new bank to cover the ones i need to pay from my Lloyds account?