HP loan switch

Good morning all,

 According to ClearScore I could switch my HP loan and save £20 a month saving me £1000 of interest.

 Has anyone done this before? Is it straightforward? Any complications?
 Any advice?

 Thanks

Comments

  • Emmia
    Emmia Posts: 2,961
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    That sounds like a large / long term loan  - you'd have to find another provider willing to lend you that money,  on top of your existing commitments (there's no guarantee you'd use the new loan to clear the existing loan)
  • sourcrates
    sourcrates Posts: 28,537
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    edited 30 December 2023 at 12:35PM
    I would tend to ignore silly comments from Clearscore that advise you that consolidation is a good thing, it isn`t.

    It may lower your monthly payment, but it increases your total debt, and increases the time you are in debt for.

    And contrary to what Clearscore say, you will pay more interest as the loan period is extended, and only 51% of borrowers get the lower advertised rate, the rest will be charged more according to risk.

    The only real benefit is to the lender, who makes more money from you, and keeps you in debt for longer.

    Not recommended.
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  • fatbelly
    fatbelly Posts: 20,232
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    I presume they are suggesting a personal loan to clear the HP. 

    If you do that then you lose your early termination rights under hp.

    Your car becomes your asset at the point you pay off the hp.
  • yoshiyella
    yoshiyella Posts: 589
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    Hi all, thank you for the comments.
     Ok, just to let you know that I went for it! The details: I bought my car on HP at quite a high rate a year ago on a 5 year plan. I’ve now transferred that to Zopa for the remaining 48 months. It is still a HP loan. Due to the difference in what they were prepared to lend me and the settlement figure I had to pay just over £500. However, my monthly payments are now down almost £80 a month .

     Thank you for all advice given.
  • fatbelly
    fatbelly Posts: 20,232
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    Well done. I didn't know this could be done. It makes you think there are probably a lot of people stuck on high interest HP who could probably refinance at a better rate. I note Lloyds offer this too.

    https://www.lloydsbank.com/car-finance/refinance.html
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