Best for a large(ish) short term loan

andykb4

Hi all,

I will soon take delivery of a new lease car, but I first need to pay the balloon payment of my current car's PCP contract, then sell it.

This means that I will need a large-ish loan (about £9.5k), but likely for only 1 to 2 months - as soon as I sell the car I would pay it back in full.  I'm doing it this way as the value of the car selling privately is more than the balloon payment, and the difference will effectively pay for a charge point to be fitted at my home (new car is electric).

What's the best way to do this?  Are there any loans available that would be suitable?  It's too much for a payday loan (and I wouldn't accept their ridiculous APRs anyway),  But would a  long term loans with minimal early repayment costs work, or is there a better way?

Thanks

Andy

DrEskimo

Have you looked at what dealers/garages/online brokers (e.g. WBAC) would offer for the car?

If it's close to the private sale price you are after, it would save you the hassle of buying out the loan first.

You could either look at a personal loan or balance transfer credit card. Depending on your income, other debt and credit history, you may get offered at a decent rate so that the short term cost of the loan isn't too high. Just be aware that any personal loan will likely have an early settlement fee on top of any interest you are charged whilst you sell the loan.

Alternatively you could advertise the car with outstanding finance, and try and negotiate the settlement of the loan before you sell the car to the new buyer....obviously it adds a rather thick layer of complexity on the transaction....

FaceHead

Most high street banks or the supermarket branded lenders allow you to overpay the loan or repay the loan in full at any time without penalty. 

So grab one on a nominal 2 year term, and then repay it when you can. 

andykb4

I just found this - which says there are no early repayment charges.  I could get the loan over 5 years, so have low repayments for the month or 2 I need it, then pay it all off once the car is sold.

Has anyone used Ratesetters before

www.ratesetter.com/help/faqs-borrowers

SaverRate

Have you looked at Motorway for selling your car? Normally a higher price than Evan Halshaw/WBAC and the dealer settles the finance and gives you any difference? RE Ratesetter, they take a while 1-2 weeks on confirming applications if they need additional information from you. They also charge a £500 fee for the loan so factor this in (its included in their APR figure not the interest rate figure!!)

andykb4

Ah - £500 fee, there's the catch! 

yksi

In theory you can borrow the £9,500 as a personal loan for let's say four years. If you get a good rate, you're looking at £200 a month in repayments. You could just throw £7500 back on it asap as an overpayment and then keep your £200 payments on the remainder for a year to avoid the early settlement fee, and all up that would probably cost you very little in interest charges.

What sort of rates are ratesetter offering you as compared with your own bank?

andykb4

As it turned out, I managed to sell it via Motorway.com on the same day my new car was delivered - they paid off the balloon payment and I got enough to cover the installation of the charger for my new electric car too!

Grumpy_chap

andykb4 said:

As it turned out, I managed to sell it via Motorway.com on the same day my new car was delivered - they paid off the balloon payment and I got enough to cover the installation of the charger for my new electric car too!

Glad this worked out and thank you for updating the outcome.  Hope you enjoy the new car.

DrEskimo

andykb4 said:

As it turned out, I managed to sell it via Motorway.com on the same day my new car was delivered - they paid off the balloon payment and I got enough to cover the installation of the charger for my new electric car too!

Nice!

What EV have you gone for?
Have owned a used Renault Zoe with 41kWh (battery owned) for last couple of years now