We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Early settlement/Overpayment
kingandy16_2
Posts: 3 Newbie
Hello,
I have a dilemma... I have an early settlement figure of £13500 for an existing loan at 6.4% that I have.
I have £7500 to make a lump sum payment but they will only reduce the length of the loan, not the amount that I pay a month (which is what I want to do).
Do I...
1. Pay off £7500 of existing loan and get a new loan at 3.5% and pay the remaining £6,000 off with that.
2. Get a new loan of approx. 3% for the full £13500 and then make my overpayment.
3. Pay off £7500 and get a 0% credit card of 6k and pay off that way.
I have 4 years left of the £13500.
Please help, thanks in advance!...Or is there a better way...
Andrew
I have a dilemma... I have an early settlement figure of £13500 for an existing loan at 6.4% that I have.
I have £7500 to make a lump sum payment but they will only reduce the length of the loan, not the amount that I pay a month (which is what I want to do).
Do I...
1. Pay off £7500 of existing loan and get a new loan at 3.5% and pay the remaining £6,000 off with that.
2. Get a new loan of approx. 3% for the full £13500 and then make my overpayment.
3. Pay off £7500 and get a 0% credit card of 6k and pay off that way.
I have 4 years left of the £13500.
Please help, thanks in advance!...Or is there a better way...
Andrew
0
Comments
-
For option 2 to work you would need to ensure the lender would reduce the payment and keep the term.
Why do you want to reduce the monthly payment rather than reduce the term which would clear the loan quicker and reduce the amount of interest paid - what is the APR on the loan you already have?0 -
kingandy16 wrote: »
3. Pay off £7500 and get a 0% credit card of 6k and pay off that way.
Andrew
Make sure it is 0% on money transfers - not balance transfers - if you try this route.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
Hi,
What if I used a different lender?
I struggle at the end of the month so save any cash, I don't mind paying it over the 4 years it is for improvements, I would then make overpayments as and when I can.
Thanks0 -
Are you garunteed to get the 3% though.Mortgage free wannabe
Actual mortgage stating amount £75,150
Overpayment paused to pay off cc
Starting balance £66,565.45
Current balance £55,819
Cc debt free.0 -
Well credit score up 983, obviously not guaranteed but surely that would help?0
-
No, because lenders don't even see it. It is meaningless. What they are interested in is your credit history.No free lunch, and no free laptop
0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.5K Banking & Borrowing
- 254.2K Reduce Debt & Boost Income
- 455.1K Spending & Discounts
- 246.6K Work, Benefits & Business
- 603K Mortgages, Homes & Bills
- 178.1K Life & Family
- 260.6K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards