Bigger loan for best rate but payback the extra immediately?
Bigger loan for best rate but payback the extra immediately?
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Benengo

Original Poster:

647 posts

232 months

Monday 24th May 2021
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Could this make sense? For me A £3k loan is 7.9% over one year but a £5k loan is 4.9%. Could I take 5k then pay back 2k straight away to get the lower rate on on the balance of 3k?

There will be a 28 day interest charge o the 2k I pay back early but this will be less than 12months at 7.9% on 3k

towser44

4,189 posts

144 months

Monday 24th May 2021
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I've done that before. Needed £2,500, it was 8.9% below £7,500 or 2.9% above that. I borrowed the £7,500 and made an overpayment as was allowed (with Halifax) a month later with the excess.

hyphen

26,262 posts

119 months

Monday 24th May 2021
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What does the contract terms say...

Whistle

1,708 posts

162 months

Monday 24th May 2021
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Done this twice with Nationwide.

The Rotrex Kid

34,732 posts

189 months

Monday 24th May 2021
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Benengo said:
Could this make sense? For me A £3k loan is 7.9% over one year but a £5k loan is 4.9%. Could I take 5k then pay back 2k straight away to get the lower rate on on the balance of 3k?

There will be a 28 day interest charge o the 2k I pay back early but this will be less than 12months at 7.9% on 3k
By my maths, the difference between 7.9 and 4.9 over 12 months is about £50. Is it worth bothering about? Just borrow the £3k if you need it.

Then if you have 28 days interest to think about it’s more like £40....