Changing my loan

mo786uk

Hi

Current loan with Sainsbury's

£15,000 over 60 months.

Interest rate is 3.4%

44 months left and total left to pay is £12,028

Settlement figure if paid today is £11,382 (273 a month)

I am looking to change over to a new loan to give me a slightly smaller repayment every month - I am happy to pay a bit in extra interest overall for this convenience.

I have found the cheapest loan to be with M and S at 2.8%.

Assuming I was to get this loan I have the following figures.

Borrow £11,400 to settle existing debt.

£251 a month for 48 months.

Total repayable £12,054

The sum of which is

I pay 4 for extra months.
I pay about £32 less each month.
The extra interest is only £26.

Assuming I really want to save £32 a month, is there any particular reason not to go for it? Am I missing anything?

As far as I can work out i would just be taking advantage of a 0.4% lower interest in order to pay less each month but pay the debt off over a slightly longer period and at a very small sum extra.

Another way of doing it is to get a 5 year loan which allows over payments and then I can pay £200 a month with flexibility to over payment. I have found a TSB loan at 2.9% which would mean interest of £240 what I am due to pay now.

Either way - might I as well take advantage of the slightly lower interest?

Also does anyone have a loan with M and S or TSB - do you get online accounts?

[Deleted User]

The main issue you'll face is that you're unlikely to get the headline rate, as you're already carrying so much debt. In fact, you may not even be accepted.

However, that's not to say that you couldn't try an application.

enthusiasticsaver

There is currently a thread on TSB loans which you might want to read. The headline rate is usually only offered to those with excellent credit records who are not overcommitted. As you already have a large loan you may find that you will not be offered the low rates you have quoted. The longer the period you pay it over the more expensive the loan will be.