A couple of years ago when changing my car I took out a loan from Alliance & Leicester. It was at a competetive apr and was with a deferred amount of £1500 to be repaid at the end of the term. This brought down the monthly repayments to a more affordable level while still enjoying the greater buying power of an extra £1500. Obviously you`re paying interest on that money but not paying it back within your monthly repayments. The idea is that at the end of the loan term you sell your car to pay the deferred amount back and then take another loan out doing the same thing again. It`s not a bad idea because most people would look to upgrade after three or four years anyway so you can drive around in a better car for that time. Alternatively you could pay back the deferred amount with some other means and keep the car or carry on with the same repayments for a further period until it is payed off. One word of warning though, if you decide to settle the acount early you will find they use the `rule of 78`. This is where the interest for the full period is loaded up front so you are only paying the interest off for the first part of the loan. You would get an early settlement discount but it doesn`t make up for the extra you will have paid
How helpful would this review be to a person making a buying decision? Rating guidelines
Advantages: Low rate, if your circumstances fit; No broker fees Disadvantages: Poor communication in later stages of application; Individual circumstances ignored
Advantages: Low rate, if your circumstances fit; No broker fees Disadvantages: Poor communication in later stages of application; Individual circumstances ignored
very helpful by (55%):
helpful by (45%):
