Northern Rock Loan

snakey_2

Situation:

Northern Rock Loan £7000 first payment £240.44 for 36 months starting 15th Novemeber 2004 and continuing now.

Loan amount: £7000
Payment Protection: £818.09
amount of credit: £7818.09
Charge for credit: £837.75
Total Amount payable: £8655.84

APR 6.9%

I know I am well into the personal loan but at this moment in time I feel the payment protection is a waste of time, am I able to cancel? or should I go somewhere else for another loan with hopefully cheaper apr to pay thid one off? If the worsth happens I have my car I could sell which would clear the loan. To be honest I don't think I would get a better apr as I have this plus two creit cards which total to £2900 owed. Any ideas? Thanks

Willsnarf1983

if ur car is worth more money than the loan and the loan allows early repayments then why not just sell the car, clear ur debts and start afresh?

only an idea not a recommendation

Will

snakey_2

Willsnarf1983 wrote:

if ur car is worth more money than the loan and the loan allows early repayments then why not just sell the car, clear ur debts and start afresh?

only an idea not a recommendation

Will

thanks for replying, totally fair point. Though if I am honest I want to keep the car, don't get me wrong I don't want to be in debt forever, but at the mo I would just rather enjoy my car. However if possible I just want to try and reduce the amount of interest I pay and/or the payment protection.

Again thanks

Xbigman

If you can afford the payments and want the car then just keep paying. You have already paid for the PPI (in fact you borrowed the money for it and are paying interest on that as well as the loan) and cancelling it would get you a rebate but not all your money back. At 6.9% there isn't anything cheaper that you can swap to without penalties wiping out any interest saved.

My advice is to sell the car and buy a banger, then clear your other debts and then save for a better car.
Regards



X

deemy2004

in black and white how PPI more than DOUBLES the cost of a loan ? What gives ? Adding it on to the capital at the start ? I though it was supposed to be a monthly premium.

I mean if it was monthly you could have cancelled it at any point and saved money. Now you have it whether you like it or not !

Xbigman

deemy2004 wrote:

I mean if it was monthly you could have cancelled it at any point and saved money. Now you have it whether you like it or not !

Thats the point. If it was a separate monthly premium you would see how much it really is and cancel it. By making it a lump sum they hide how much it costs in real terms so make a profit from an expensive policy, then they lend you the money so they make a profit from the interest and finally if you cancel they only give you a partial rebate so they make a profit from a policy which cannot now ever pay out.

The total banking industries profits last year were 30 odd billion. This is one of the reasons why.

Regards



X