Consolidation Loan

Pixie5740

Sinev89 wrote: »

The PCDL at £210.09

So the PCDL effectively has a rate of 0% since all the interest has been waived yet somehow it works out £50 a month cheaper for you to have a more expensive loan? Are you just comparing monthly repayments i.e. the new loan has a monthly repayment £50 lower than the PCDL, rather than looking at the overall cost of each loan over their full terms?

Sinev89

Yes. ... but to be honest, because it will end in the same month I'm less concerned with the total cost, if that makes sense?

Sinev89

Comparing paying £50 less each month for the same term

Ebe_Scrooge

Sinev89 wrote: »

Yes. ... but to be honest, because it will end in the same month I'm less concerned with the total cost, if that makes sense?

No, it doesn't make sense, to be frank.

I've read this thread a couple of times, and I can't get my head round it.

Your PCDL loan is effectively at 0% APR, yet an interest-bearing loan is cheaper ? No, that cannot be right. Check your figures very carefully. Yes, the interest-bearing loan may have lower monthly repayments, but the total amount payable over the term of the loan MUST be higher than the 0% loan. Why on earth would you "not be concerned" over the total amount repayable ? Take the option that saves you the most money.

Unless cash is so tight that you can't afford the "extra" £50 per month ? In which case that's a different problem.

Sinev89

I know what you mean, I need to get all the facts and figures - I'll be back!

forgotmyname

So you have taken a loan and thinking of using that to just pay the PCDL monthly instead of clearing the full balance?

As mentioned though. I dont see how you got a loan at a lower interest rate than 0%.

The only way for the montly amount to be lower is paying over a longer term. Paying the balance over 5 years instead of another 3?