Loans - Borrowing more than you need

[Netwacky87]

Hi All!

 

I have a question for anybody who has ever taken out a loan,

 

I want to borrow some money for a new car from the bank (halifax) now, I can get 6.8% apr on a loan of 7k but the car I am getting is only 5k (5k aswell for my part ex)

 

If I borrow 7k for the lower APR and then pay back 2k later in the year, is this acceptable? the woman on the phone from Halifax seems to think I cant do that but she said theres nothing stopping me....Has anybody done this before? Just curious

 

Mart

[SYNACK]

Depends on the contract, some have a fixed payment rate and term with the equivalent of an early termination fee. This allows the company to properly project the return on investment and make sure that the interest they can charge covers their expences and profits.

 

Just get a fully copy of the terms of the contract and you should be able to see if this applies.

[unixman_again]

Some companies allow this. Zopa UK Loans is one. I borrowed a sum from them when I was car shopping and when I found a car £1000 cheaper than I had borrowed, I immediately paid back the extra without penalty. With this company, you can pay extra whenever you want. It is my experience that building societies and banks don't allow this, but as SYNACK said ask them.

[twin--turbo]

Don't need to worry about things like that as I have a Offsetting Mortgage that gives me gr8 flexibility for instantly accessing cash at 4% . Best financial move I have ever made apart from buying our first house and selling it 9 years later for over twice what we paid.

 

Rob

[Netwacky87]

Thanks everyone, I know the halifax will let me repay more each month than the set repayments but I was just wondering because I actually need 5k and im asking for 7k (to get the lower APR) if im allowed to do that...Do they actually check up on what you used the money for...?

[jmak]

Do they actually check up on what you used the money for...?

 

Unlikely, as it will be an unsecured loan. As others have said, check the terms carefully cos there are often restrictions. It's quite common to limit the amount that you can overpay. Do your sums to make sure that the interest you'll pay on the extra loan won't out weigh the saving in borrowing at a lower rate. Equally, it's not unusual for the savvy shopper to be able to find loop holes that can be played to your advantage.

 

And make sure you don't spend the extra cash

[bodminman]

+1 for Zopa

 

Dead easy application, good rates and very flexible!

[Netwacky87]

Hi all, Happy Christmas!

 

I'm off to buy a new car tomorrow cuz Arnold Clark have a Boxing Day sale!

 

The choices - 12' plate Renault Clio 1.5 tomtom edition

 

Or 1.4 ford fiesta black (Bluetooth but no satnav)...

 

I've heard bad things about renaults and that they have a bad reputation, anybody have any comments or experience with both?

[jmak]

Ford every time.

 

Make sure you drive it and try out every switch before you take it away. The Renaults are supposed to drive nicely, but the JD Power survey is more than enough to put me off. I like a car to be interesting and fun to drive - but first priority is a level of confidence that I will get to where I want to be without calling the AA.

 

All the Fords I've driven recently have been good to drive too.

[featured_spectre]

Fords tend to have fuse box issues. If possible go for the new astra 1.4. Comes with bluetooth and tomtom with full european maps (and updates) as standard. Most vauxhall dealers also do free road tax every year if you use them for services.

 

Also if possible...any car you buy...try to get ir pre-registered. Its basically one bought by the showroom so they hit bonus targets and usually knocks 20% off the price.

[Netwacky87]

I dont have that sort of money nephilim lol, im off to see a 12' plate VW Polo bluemotion tomorrow

[featured_spectre]

Well any car you buy....look for pre reg...simply for how much it takes off the sale value. It has same mileage as new. Same deals effecrively. Just the forecourt owner is the previous owner. Have done this with ny brothers when they buy cars.

[twin--turbo]

I dont have that sort of money nephilim lol, im off to see a 12' plate VW Polo bluemotion tomorrow

 

How many miles do you do a year, you have to be doing a lot of miles to make a deisel worth the cost.

 

http://www.which.co.uk/cars/driving/driver-tools/petrol-vs-diesel/choosing-between-petrol-and-diesel/

 

As for issues with ford fuse boxes can't say I have heard of any and I am active on a number of Ford forums.

 

 

And Built in SAT NAV was classed as one of the pointless "Options" in a study a year or two back. Although you may get updates for a while the hardware becomes outdated and your stuck with old technology. My 2k1 Jag "Could" have sat nav but the last update was 2002! and the hardware is non touch , B&W.

 

 

TT

Edited December 27, 2012 by twin--turbo

[SYNACK]

And Built in SAT NAV was classed as one of the pointless "Options" in a study a year or two back. Although you may get updates for a while the hardware becomes outdated and your stuck with old technology. My 2k1 Jag "Could" have sat nav but the last update was 2002! and the hardware is non touch , B&W.

 

Agreed re the built in satnav but I wouldn't be down on it for being non-touch. In a car you need decent haptic feedback so you don't crash your car every time you need to press a button - sure it's not that bad but way worse than a real button or several along with the touch so that its a bit safer.