Loan Choice Help please

Faithfull44

Good Afternoon,

I'm looking to take out a loan to purchase a new family car. It will be a used vehicle with a maximum spend of £9000 - over a 4 or 5 year period.

I have £5000 saved already. The options/dilemma i have is do i take a:

1 - Loan for £4000 out at a higher rate percentage (around 9.5%)

2 - or take out a loan for £9000 at a lower rate (around 6% with Tesco's) and then a couple months in to the term make an over payment of £5000.

Tesco's advise that if you make a over-payment it just brings down the overall length of the loan period OR you can speak to them to ask them to bring down the monthly payment cost instead.

I'm not very good with this and was wondering which would be the best/cheapest way of doing it? I'm not overly fussed on the sum i pay back, its about keeping the monthly cost as low as possible.

I didn't know if there was a way of working it out? Any advice would be appreciated.

Adi.

MEM62

I'm not very good with this and was wondering which would be the best/cheapest way of doing it? 

The cheapest way of doing it is to buy a £5,000 car and avoid the loan altogether.

sourcrates

I agree, please don`t borrow what you don`t really need, more recent petrol vehicles in particular, will be wet belt, which require much more maintenance, and a belt change every 40,000 plus they are rubbish, and should be avoided.

You will be much better off with a 10 year old family car, dry belt, long maintenance schedule, last you another 10 years at least if you pick a good one, todays ICE cars are really bad compared to a few years ago, a deliberate attempt by the motor industry to ween us off petrol and into a battery car, my own opinion of course.

Altior

https://forums.moneysavingexpert.com/discussion/6678097/loan-choice-help-please

The lowest cost way to fund the full loan you've outlined is the Tesco method. And if you want to maintain the term and reduce the monthly commitment, then that's that lowest monthly cost out of the options that you've outlined.