Better rate on a recent loan

Philip624

I took out a Santander loan in July at a rate of 14.9%, the best offer available at the time for me. Since then my credit situation has greatly improved and when I checked the mse eligibility tool it offered a 100% eligibility rate and guaranteed rate of 8.2% with Admiral on a quote for loan consolidation. This would reduce my term by 8 months and almost £3000 in interest once the settlement figure is paid. Is consolidation the right terminology here? I would be taking out one loan to pay off another but actually reducing the amount owed in the process. Would doing so after such a short period with Santander harm my credit report? Not that I need or have any intention of applying for new credit cards in the short term.

[Deleted User]

Yes, it's consolidation. If you can get a loan at a lower rate, it makes sense to do so, as long as you pay off the existing one and don't increase your debt.