Car loan advise please

gracie83

Sadly the car is on it's last legs and with the MoT due to January (and a large bill expected) I am thinking it would be wise to get a new one.

The car I am looking for is around £3000 maybe £4000. I am looking for a loan spread over a stupid number of years so I have a low monthly repayment so i can save up and pay the full amount off in around a year.

The only company I can find who will do this is northern rock at average 8.9% over 10 years coming up with £37 per month for £3000 or £49 per month for £4000 and I can pay this back in full as soon as I can.

Questions -
1. i already have a loan with northern rock with a year left till clearance. would this affect application or would they have to be put together?
2. is northern rock being more strict than before after recent events?
3. Are companies happy to offer low amounts over a long time when it i obvious people are going to pay them back early?
4. any other companies who will provide such a low amount over such a long period of time?

Thanks for your help.

CLAPTON

I can see no logic in your proposal.
If you can afford to repay the loan in one year then why not get a loan for one year.

In any event why not wait until the MOT to see whether or not it fails.. if it doesn't you can save up enough to buy a car with cash within a year.
From what you say you have at least 400 a month spare... are you already saving that up... that will mount up pretty rapidly.

Phantom_Flan_Flinger

If you apply to Northern Rock and get accepted, both loans will be put together.

Your existing loan will be closed, minus any saved interest for paying early.
This will then be added to the amount you want for the new loan and you'll pay the total on whatever interest rate they've given you.

Remember their rate is 8.9% typical, so depending on your credit rating you may be offered a higher rate. If you've got a good rate on your existing loan, there is a chance you could end up with a higher rate than on your current one.