Loan at 6.7%, Can we beat it down?

blossomillie

Hi There,

Applied for a £25,000 loan at 3.2% It has been approved over 60 Months but the APR is now 6.7%.

The monthly payment is £489.20.

If we pay it off in say 48 months would that actually bring the APR down and if so how much? We can over pay with no charge.

Thank you!

[Deleted User]

Early repayment won't change the APR. But you will pay less interest.

blossomillie

How do I work out how much less, then can't I rework the APR on paper?

[Deleted User]

It doesn't change the APR.

The APR is the rate you pay over a year. Does't matter if it's one year or a thousand.

Use a loan calculator to see how much interest you'll pay on different terms.

bazzyb

At 6.7% APR you would pay £29,351.09 in total on a 60 month term and £28,459.41 on a 48 term.

Making over payments or settling early would likely see you paying a sum somewhere between the two figures buy it would be extremely complex to calculate as it depends on when you make the overpayment, how much is left outstanding at that point, how the lender applies that payment to the outstanding balance, and what fees there are for early settlement (if any).

blossomillie

I want it to work out at under 5% Apr, So what would we have to pay a month, over 48 months? (You are a genius if you can work that out! lol)

[Deleted User]

If you borrowed 25k at 5% over 48 months, your monthly payments would be around £575.

Obviously a higher rate would increase your payments.

PeacefulWaters

blossomillie wrote: »

I want it to work out at under 5% Apr, So what would we have to pay a month, over 48 months? (You are a genius if you can work that out! lol)

If the lender won't let you the money at 5% what's the point of your question?

takman

blossomillie wrote: »

I want it to work out at under 5% Apr, So what would we have to pay a month, over 48 months? (You are a genius if you can work that out! lol)

Well if the loan was 5% over 60 months it would cost a total of £28,230.60 vs 6.7% it will cost a total of £29,351.09.

So if what you are saying is that you want to pay around £28,230.60 in total then you could pay £627.54 a month for 45 months.

foxy-stoat

blossomillie wrote: »

I want it to work out at under 5% Apr, So what would we have to pay a month, over 48 months? (You are a genius if you can work that out! lol)

Sounds like your overcomplicating it !




Just overpay by £100 a month and you wont be too far out.

bazzyb

blossomillie wrote: »

I want it to work out at under 5% Apr, So what would we have to pay a month, over 48 months? (You are a genius if you can work that out! lol)

It won't work out at under 5% APR. If the rate is 6.7% APR, that is the rate you will pay regardless of how soon you pay it off.