Covering one 'loan' with another

A question about : Covering one 'loan' with another

Hi, basically I have a car on finance with Stoneacre. I have just over 2 and a half years left to pay at Ј310 a month.

If I clear off the finance (which will be roughly Ј6,000) with another loan I could get for Ј6,000 and spread the costs over the same time scale (2 and a half years), I could get a loan and pay only Ј212 a month due to far less interest.

Is it possible to do this and how would I go about it?

Best answers:

• Thats assuming the new loan is at a lower interest rate than the one your currently paying?
  To save Ј98 a month in interest must be some rate your paying?
  Old loan at 37% ? New loan at 4 % ?
  Is your credit good enough to get a Ј6000 loan at 4% ?
  How to go about it. Get a true settlement figure from the car finance company and then apply for a loan of that amount. If accepted then pay the car loan off.
  Make sure you get the settlement figure first though.
• Will depend on your credit history and especially your salary. Ј6k outstanding plus the extra Ј6k you are borrowing is Ј12k, double this is Ј24k, you will need to earn over Ј24k or you will be deemed high risk, this is assuming you have no other debt.
• Many lenders only give their best rates to loans Ј7500 and above and with an A1 credit rating.