Egg Top up Loan - Rate Change

chowster

Hi all, wondering if someone with more mathematical skills then me can help..

I have an Egg loan at the moment that has about 2 years left to run (approx 5k) at 10.9apr. Egg are offering me a top up loan which I would normally say no to but if I do accept it the WHOLE loan goes down to 7.9Aapr. I need only borrow a further 500 pounds for 7.9apr to apply to the whole loan.

Is this worth doing, ie will I save money by doing this or not?

roadrash

Hey!

Well let me see if I have this correct..

£5000 at 10.9%, you are currently paying £545 a year interest.

£5500 at 7.9% you will be paying £434.50 a year interest.

I hope this helps and the figures are correct. Please, if anyone thinks they are wrong, please put me straight. I would hate for chowster to make a wrong decision based on my crappie figures! )

James

Update: Also to add to this, I have an Egg loan too, and I know that if you have more money one month you can pay some back with no penalties at any time Which is nice ;D

chowster

Thanks for the reply.. ;D

Yeah seems a strange way of saving money doesn't it to get into more debt but the guy at egg said that if I did this I would save money... Wasn't just going to say ok then without thinking about it first....but your reply certainly makes it look viable..

cheers

chowster

creditman

Since there is no early repayment penalty on egg loans you could pay back the extra £500 of borrowing straight away and save a little more interest.

chowster

Since there is no early repayment penalty on egg loans you could pay back the extra £500 of borrowing straight away and save a little more interest.

Very good point creditman thanks.....!! ;D ;D ;D