Paying finance off with a loan..

gabyjane

OK well I'm self employed and paying more isnt really an option tbh.. What figures do I need to list please

knightstyle

Unless you can get a cheap credit card deal the bank rate will almost certainly be higher than you are paying at the moment.

gabyjane

knightstyle wrote: »

Unless you can get a cheap credit card deal the bank rate will almost certainly be higher than you are paying at the moment.

OK so my last payments Dec 2023..a loan to cover it works out at around £70 month cheaper.. IF I can get it.. 4 years term.. Not sure how to figure out wether its better or not though?!

uknick

Without any numbers being given, I'd suggest adding up what you'll pay, from now, in total with existing finance. Then, add up what you'll pay over the life of the new loan, plus any early redemption charges for the existing loan. Whichever number comes lower is the best option.

Goudy

If your last payment is Dec 2023, it looks like you still have 53 payments at £229 which is £12137 if left over the full term, but you need to know how much to borrow and at what cost to work out if you'd be any better off.

Most finance companies usually reduce some of the interest payable if you settle early.
Some might do this but add an admin charge to it.
Other won't reduce the interest AND add an admin charge.

By the looks of Motonovo, they don't charge a fee but you need to register/login to request a settlement figure.
https://customer.motonovofinance.com/help-and-support/can-i-settle-my-agreement-early

gabyjane

OK so my settlement is just over £9k so a lot cheaper to settle than pay the term. A loan would be a lot cheaper I think but I'll work out as mentioned above and see.

gabyjane

So my finance would be £9900 to pay off as a whole. If I carry on paying the full term its over £12k
A loan would be £180 a month over 60 months making it just over £10k..
Can anyone with a brain help me work out which is best as obviously ones cheaper but longer so?!

facade

Taking the loan to pay off the finance costs £180 x 60 =£10,800
Sticking with the existing finance costs £229 x 53 = £12,137, so you save £12,137 - £10,800 = £1,337 if you take the loan to pay it off.


But


1) that loan seems suspiciously cheap, only £900 interest over 5 years.
2) You are tied into paying over an even longer term.
3) you have to pay it all back, you cannot hand the car back (VT) at 50% on a loan like you could on finance.



Why not do as Hunter Jaeger suggests, and get the loan over 48 months? it would likely be around £220 a month, which will save you money, and finish earlier than your finance.