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personal loan repayments

Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
This is probably a really dumb question but I've never even contemplated getting a personal loan before now so forgive me.......I'm thinking about getting a £7000 loan to help me get into this business venture, and was just looking online for a reasonable APR (northern rock was the best i found at 5.8% - if anyone knows a better one by all means tell me) and the monthly repayments obviously vary depending on how long you want to pay it off.........my question is if your financial circumstances change and you want to pay off a big chunk or even all of it are there any restrictions on over payments?.......I've been doing some research on mortgages and in some cases there are penalties on overpayments but I'm not sure if this is the same, can someone please enlighten me......

Comments

  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    It depends, especially for mortgages. I would have thought a simple bank loan could be paid off without a fee, but you're best seeking advice from an independent financial adviser.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    cool, i'm only wondering about personal loans right now because i know what fuckers banks are and I don't want to get tied into anything.......just been looking around and RBS and Natwest do interest free graduate loans of up to £2000 so I could get £4000 that way and then I'd only need a £3000 normal loan, I would have thought all the other banks did interest free graduate loans as well but not according to this site......

    http://www.moneyfacts.co.uk/loans/charts/banking_grad_loan.htm
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    On most unsecured personal loans you can't pay off more than the monthly repayment, either you pay the monthly payment or you pay the balance. There's not usually an early repayment charge, but because of the way payments are structured it is likely that if you were to repay early in the loan you would pay a lot.

    Not all personal loans are like that though, you're best off talking to a bank or financial advisor about it all.

    Be aware that RBS and NatWest are the same bank, and its unlikely they would both loan you the money.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    okay cheers for that, yeah as long as you can pay the balance early that's what I'm after........I don't understand what you mean about the payment structure when you say you would pay more if you pay it off earlier, surely you'd be saving money on all the interest you would have had to pay......?
    Kermit wrote:
    Be aware that RBS and NatWest are the same bank, and its unlikely they would both loan you the money.

    lol bollocks.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Cahoot offer what you're looking for. :)
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    As it's for a business, have you looked into getting a business grant? There are a few places offering these. I don't know the criteria but a friend's just been awarded one from the Prince's trust. Worth looking into anyway...
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    yeah i've heard about these business grants but this isn't exactly an orthodox business so i doubt i'd be eligible.......thanks for the advice click to see more, i think a cahoot flexible loan is just what i'm after, 6.9% APR but you only pay interest on what you borrow, and as I'm not exactly sure how much I need this is probably the way to go, great stuff peeps.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Kermit wrote:
    Be aware that RBS and NatWest are the same bank, and its unlikely they would both loan you the money.



    Also to bear in mind that you will then have 2 different lots of payments coming out each month, which you might not be able to afford.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    I don't understand what you mean about the payment structure when you say you would pay more if you pay it off earlier, surely you'd be saving money on all the interest you would have had to pay......?

    At first, your monthly payment is mostly paying the interest.

    So if you loan £5000 for example, and pay £150 a month, after six months you'll have paid in £900, but the redemption figure may still be £4750.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Kermit wrote:
    At first, your monthly payment is mostly paying the interest.

    So if you loan £5000 for example, and pay £150 a month, after six months you'll have paid in £900, but the redemption figure may still be £4750.

    oh shit so that's what all that redemption stuff's about, i thought all the payments had an equal ratio of interest, but that would just be too obvious....... cheers for the tip, you need all the help you can get with these kinds of things cos banks are just out to rob you blind.
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