Expensive Loan

[shelley2]

Hi - I just took out a loan of 12,500 with alot of difficulty, eventually it went to the underwriters and was given to me, over 6 years i will be paying back nearly 19,000. Do you think if i went to another bank, could i get a cheaper loan and pay off the one i have? I didnt have any bad credit - just too much credit this was the reason i couldnt get the loan in the first place, but eventually my own bank gave me the loan - am i being ripped off??

[Gevs1966]

If you got loan protection that the banks sell then yes you are being ripped off as that would probably added another couple of grand to the total repayment!

[Loosehead]

What was the interest rate? I bet they ripped you off for payment protection. Are there early repayment costs? The dreaded rule of 78 is abolished but there are still potential penalties for repaying early. Did you really need that loan?

EEK! If you are still within the cooling off period abandon the deal urgently. I've just done some rough calcs and the rate you are paying is about 15% apr Horrendous, you must have repayment protection in there as well for it to be that much. So if you can get out cheaply do. It's quite easy to borrow at 7% so you can save yourself a fortune 12500 over 72 months at 7% = 213.11 per month (total 15344) . Oh and never ever ever ever take out the repayment protection insurance it is very very very expensive, if you feel you need protection get a reducing term assurance for about 5% of the cost!

[Mrs_Pegasus]

By what you have said you may not be able to get a loan elsewhere and therefore will just build up searches on your credit file.

It does sound like you have been given the loan with a higher interest rate because of your credit history. You are being viewed as a higher risk.

[shelley2]

Thanks everyone - no i did not take out the protection.. I think the apr is 14.4%. There is an early repayment fee but i think its only about 2 months interest..!! which if i could get a cheaper loan i wouldnt mind paying.. Im paying �260 a month on the 12,5000...!!! for 6 years