Loans - Partial Early Repayment

cgibbs11

Hi,

After some advice... if I took out a loan for say £12k over 60 months, and within a few months, paid off the majority, leaving me with say a £2k balance, what would the impact be on my repayments?

Would the remaining c.£2k then be spread over the remaining term of the loan, (preferable), or would the fixed monthly payments that were initially set up on taking out the loan remain, and the residual balance would simply be paid off quicker, (i.e. term reduce).

Scenario being: need to buy new car. Current car worth £10k, new car worth £12k. Can't be without car, so need to buy new one before getting rid of old one. Therefore cash tied up in current car. So proposed to buy new one on loan, then repay majority as soon as old car sold. Paying off the remaining balance over a fixed term.

This would give me the liquidity I need, and also potentially tie me into a lower APR by taking out a larger initial amount.

Interested in thoughts / advice?

Many thanks.

[Deleted User]

In most cases, the payments will remain the same.

There's one or two lenders will reduce the payments.

DCFC79

A long overdue welcome is needed.

What does your agreement say ?

I would imagine the term would stay the same and payments woukd reduce.

Whats wrong with the current car ?

cgibbs11

DCFC79 wrote: »

A long overdue welcome is needed.

What does your agreement say ?

I would imagine the term would stay the same and payments woukd reduce.

Whats wrong with the current car ?

No agreement. This is all just hypothetical. Bit of research before deciding on course of action.

Current car = 2 seater. Need larger.

ed67812

I used zopa for my car loan.
Spent a bit less than I thought and repaid the remaining cash back onto the loan. My term hasn't changed but the monthly payments have.

bobbymotors

Why not trade in your existing car and don't have all the grief of a loan?

You will struggle to sell a £10000 car privately anyway

cgibbs11

bobbymotors wrote: »

Why not trade in your existing car and don't have all the grief of a loan?

You will struggle to sell a £10000 car privately anyway

Thanks Bobby. Looking to maxmise the money I can get out of the old car, so value that higher than the "hassle" that comes with a private sale.

I can't imagine that a private seller market for cars over £10k doesn't exist, but maybe I'll be proved wrong!

System

Oh it most certainly does exist, especially for 2 seaters and classics at this time of year as the sun comes out to play

ratrace

It does exist, my mate just sold his x5 for £10,750 and the lady buying it just took out a personal loan to buy it,so yes people will BUT it wont be a quick sale it could take weeks/months depending how cheap it is compared to others outthere

plus people buying at that price will be very very picky so be prepare to haggle this lady took over 2 weeks to buy the x5

for an easy sale people go to the likes of we buy any car but end up losing a lot of money by selling to them