Comparing loans - or at least trying!

Mjkpio

StopIt wrote: »

I'm confused, how can the 2 month holiday save £400pm if the monthly payments are £250

I pay £400/m now (car finance) but the loan will reduce that to £250/m. So I pay nothing for 2 months (and save the £400 I would have been paying) then start paying £250 after that. The first £400 will go towards paying off the car finance, the second will be allocated against the cost of the interest.

StopIt wrote: »

Also, have you calculated that the interest may still be added onto the loan for the holiday despite you not paying for it at the time?

Yes, and it's negligible in comparison to the 2 months savings.

Mjkpio

Bedsit_Bob wrote: »

Then I suggest you put off the wedding, until the debt has been cleared, and you have saved enough money, to pay for the wedding.

Well the wedding's happening in 2 years, noughts gonna change that. We know we're able to save what we need in time. The car's either going to be an issue now or in 6 months, so I'd rather get it sorted now, I'll have to take out a personal loan either way. My car allowance covers the car payments currently so I'll be able to save the extra when the payments reduce. For now it'll go into savings, then as that hits the target it'll go to overpayments/pay off early.