Loan question

findingthisdifficult

Evening All,

Apologies in advance if this is a stupid question...

Mr FTD and I have a joint loan which has 12.4K outstanding currently at 5.4% APR, is it worth us looking at refinancing it to a lower APR over a couple of years and then using the difference in repayment amount to over pay it and get rid of it quicker?

Does that make sense? Is it even possible?

I can't wait to get out of the debt cycle.

Thanks in advance.

[Deleted User]

If you can get it at a lower rate, yes.

However, remember that you are asking to double your debt so the chance of getting a lower rate are slim, as your risk level is increasing.

findingthisdifficult

Thanks zx81.
With the exception of our mortgage and a credit card that will be paid off in the next few months, we're not using any other credit, maybe I'll wait until we've paid the card off and then review the options available to us.

Craig1981

when credit card is clear, have a look at another loan to clear the settlement amount of existing loan and see if you will save with a lower APR. If not, just overpay loan with what you currently paying on your CC, you will save interest this way on your current loan

findingthisdifficult

Thanks Craig, that was my initial plan to clear the CC and then use the CC payment to overpay on the loan but if I can save money on the interest by refinancing then I might do that instead.