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Loan help

This might sound a bit odd, but I need to lend 5 grand, however if I lend 7.5 grand I can get lower interest rate, this seems too simple so probably a stupid question but could I lend that and pay 2.5k back straight away? And be on a lower interest rate for the remaining 5k? 

Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Who do you want to lend it to?

    And more importantly, do you trust them to pay you back?
  • sambaird
    sambaird Posts: 152 Forumite
    Third Anniversary 100 Posts Name Dropper
    I think the OP is confusing leading with borrowing.
  • Ahh right yeah where I’m from we would say lend, but yeah I’m after a 5 grand loan for myself
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    You can borrow the larger amount to get the lower rate and repay the surplus, but you'll need to factor in the early repayment charge.

    Most lenders will then maintain the same normal monthly payments, but reduce the term.  Some will allow a reduced amount over the same term, so you'd need to know if this is a critical factor.
  • Grumpy_chap
    Grumpy_chap Posts: 18,570 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    The OP's idea makes sense.  It can only be answered by looking at the terms & conditions with the loan that the OP will take out.  Any answer from the forum will be a guess / typical only and may not apply to the actual product in question.
  • macman
    macman Posts: 53,129 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    sambaird said:
    I think the OP is confusing leading with borrowing.
    In that case, I'd like to borrow £7.5K and receive some interest on it: can anyone help me?
    No free lunch, and no free laptop ;)
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