swap cahooot flexible loan to fixed rate to save

loates123

i see that with cahoot u can swap around i have a flexible loan with them with is 7.7 apr at the moment but it i swaped to a fixed rate it would be 5.7 am i better off doing this?

Debt_Free_Chick

Very difficult to evaluate.

Firstly, the interest rate for the flexible loan applies only to the outstanding balance. You can, if your finances permit, control the outstanding balance, as you can pay off as much as you like. It's like a revolving overdraft.

With the fixed rate loan, you lose all flexibility. You borrow a fixed amount; you pay it back over a fixed period of time; and you pay back a fixed amount every month. This might suit if want a disciplined repayment programme, with no flexibility to pay off more and little flexibility to pay it off early. And if interest rates fall during the repayment period, then tough - you have a fixed rate loan!

If you have a personal plan to repay your flexible loan e.g. by piling in extra repayments when finances permit, then this might work to your advantage. Especially if you pay it off sooner than you would, if you took a fixed rate loan. Another possible advantage .. should you see it that way .. is that, having paid the flexible loan off, you can then borrow it again immediately. Indeed, you can always borrow the difference between the amount you owe and the limit of the loan.

It depends on your circumstances... post back if you're not sure.

Robert_Sterling_3

I think the chick is right without a shadow of doubt.

freddyfeet

I've also got a cahoot flexible loan and I fot a bit annoyed when they were advertising a much lower interest rate on their front page than I had got when I took the loan about two years ago. I asked them if I could have the lower rate but they said each loan is calculated by 'individual circumstances'. This isn't fair as I originally got the headline rate but interest rates had fallen in the meantime.

Anyway, I decided to get a Mint credit card with a balance transfer rate of 3.75% fixed for the life of the balance and transfer the cahoot loan to this and just use the card for that purpose. So I can still make flexible payments.

loates123

where did u get that rate are are there any company that can be this, i want to get the apr i am paying with cahoot down , i pay 7.7%

loates123

anyone know ::)

Debt_Free_Chick

Check out Martin's article on Credit Cards. You need one with a low "life of balance" APR, so you can transfer the balance from your loan.

However, most do not allow a BT to an account (like the Cahoot loan account) so you need one that allows a Super BT. With a SBT you transfer from the low (or even zero) APR card to your current account and then use that amount to settle your Cahoot loan.

The debt is then on your new card.

HTH

loates123

thanks had a look not sure which one is a super bt one tho ???

Margaret_Millne

Martin has several articles on credit cards.  

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1085355871,12390,

Not up on links yet.  Try cutting and pasting this into your browser.

Link doesn't work, just tried it, but cutting and pasting does.

Debt_Free_Chick

thanks had a look not sure which one is a super bt one tho ???

Egg is SBT. MBNA is too, but they may charge a fee (maximum fee was £50, but it can be varied, by MBNA changing the terms & conditions, so check).

Mint also allow a BT to a current cheque if you use the special BT cheques they give you.