Need a loan in July. Apply now?

[Ransoman]

Hi all,

Edit: The topic title should have had a question mark at the end of "Apply now". I can't change it though....

The PCP on my Abarth ends in July. I am more than happy with the car and given that the mileage is way under what I planned (thanks covid...) and it is in fantastic condition, I plan to pay the balloon and own the car outright.

I don't recall exactly what the balloon payment will be but I think it is £7500. I plan to take a personal loan to cover this. Am I fine to wait until July or should I apply early to avoid any potential interest rate rises between now and then?

Also, the best rate I can find is M&S bank at 2.8% over 36 months (£217 pm). Do you think I could do any better than that? I am trying to keep my repayments as close as possible to my existing payments (£199 per month)

Edited by Ransoman on Saturday 12th March 19:43

[Mark83]

Why not take the loan now, settle early and save some interest?

[22]

Probably worth getting an early settlement quote. I don't know how PCP works and if interest is stacked towards the earlier months/years. Obviously not if 0%. Do the finance company not offer something for this scenario?

2.8 sounds decent for a unsecured loan. Make sure that's the rate they will offer you though and not 'typical'.

[Ransoman]

Thanks, that's not a bad idea. I hadn't considered that. I'll get in touch this week and see what the settlement cost will be,

[Condi]

If you have the capital to secure it against the house you can probably get it for 1.9% or thereabouts.

It doesnt sound much different, but if you took £15k over 5 years you'd pay just under twice as much interest at 2.9% as 1.9%.