Worth trying to refinance a loan?

oliel

13 months ago i applied for a joint loan online with Tesco bank.   I recall the rate agreed when I applied online was pretty good.  However when the paperwork came through the rate was higher.  When I queried this they said that there was an error on my online application I had mistakenly put mr for me not mrs and therefore they had to do a hard credit search which resulted in a less favourable rate.  I took the loan as I needed the money.  In the mean time I applied for a joint loan with sainsburys and they offered a better rate so i took that loan and cancelled the tesco loan.  (The rate I took was still higher than the initial one offered with tesco).  Now 13 months in I am wondering if its worth me shopping round to see if i can get the rate down a bit.  I did an elligablity check on tesco - this said id be unlikely to be accepted - however i was only able to do this for a single personal loan - is there anywhere i could do an eligibility checker for a joint loan?  The rate we currently have on the loan is apr 10.10%

MorningcoffeeIV

It depends on what rate you could get and how long left to run on the loan. It may be cheaper to overpay and clear it.

Do an eligibility checker in a sole name. If you need a joint loan for affordability, then you're not likely to be accepted for further borrowing. A rate of 10% suggests you're already at the higher end of the risk scale. 

MalMonroe

Tesco would have had to do a hard search anyway, whatever your gender, so I don't understand the logic with that first loan. 

I'm inclined to agree with MorningcoffeeIV above - try to overpay the loan and clear it. If you start shopping around for loans, when you actually apply there will be another hard search on your credit report.

A reminder from this site - "remember MSE's stance on loans: 'borrow as little as possible, repay as quickly as possible' "

There's some info here about eligibility for joint loans -

https://www.moneysupermarket.com/loans/joint-loans/

But if it were me, I'd be wanting to clear that loan completely, rather than taking out yet another one. You could find yourself in a never-ending debt spiral - and from personal experience I can tell you that is not where you want to be. 

Dobbibill

I would look at overpaying first and foremost! You can overpay small and often with some loans (do check your T&Cs)

If you look at another loan, make sure it's going to be a shorter term if poss as well as a lower APR than your current loan (ie if that loan was 36 months, you are now 13 months in so don't want to go back to a 36 month loan but rather a lower rate for 23 months ideally etc) but also remember you can't borrow your way out of debt so approach refinance with care. 

All the best

mdj1876

Please remember that most loan companies charge (usually 56 days but check your contract) interest when you settle early. 

So say if you refinance, you are saving £500, but to pay off your current loan it costs you £250, it's probably not worth another credit search and another credit account adding to your credit file. You'd need to be making significant savings and shortening the term to make it worthwhile.

Also, in this climate, a 10% rate really isn't that bad! If you have less-than-perfect credit, I wouldn't imagine you'll be offered anything better than what you currently have.