Sainsburys Loans - Need to ask about overpaying to bring down the repayment time

[DJMK4]

Hi,

I am looking to get a Sainsburys loan, I have asked this question before on the forum, and before anyone says (speak with Sainsburys Finance) I have, however they wasnt very clear (and I spoke with them a few times)

I am looking to get out a £5k loan, to purchase a new car, this will primaraly be a 24 month (2 year) loan.

However, after purchasing the car, I will be straight away selling my current car (for around £1.1-£1.2k), I will also have another £1k saved up, so a total of £2.1-2.2k

I would straight away, like to make a lump sum payment back on the loan, bringing down the total amount needing to repay to be £2.9k

I have spoken with Sainsburys to confirm if lump sum repayments are allowed, they confirmed it however they started going on about 1/4 repayments, 1/2 repayments, 3/4 repayments, and started going on about % charges of the total amount.

As im not clued up on loans, this was very unclear to me.

Im laymen's terms, I need to know if I can make "overpayments" or lump sum payments in addition to the monthly direct debit that will come out my bank, primaraly to bring down the time it takes to repay the loan? will there be any charges?

I have spoken to a few advisors at Sainsburys, and no one could give me a straight answer.


Thanks all

 

[DJMK4]

Stick to the repayments they ask, keep the 2k in the bank

or sell car first and buy a better car for 7k

Id rather not keep the 2k, I would prefer to put it back on the loan asap through lump sum repayment.

With interest rates at what they are, its not going to be worth keeping it in the bank, also, it will just tempt me to spend it.

Selling the car first is also not an option, as I would be left with no car to do a 60 mile a day commute with

 

[DJMK4]

Companies don't like overpayments because it means they are getting less interest out of you, I find it to believe that nobody could give you a straight answer!

Well

A) They were going on about 1/4 payments, 1/2 payments, 3/4 payments, when I asked them to clearly explain what this actually meant they said they couldnt really as they couldnt give me an example of how it would work.

B) I asked about charges, again they couldnt give me an answer because they couldnt give me any examples on how it would work until I made the application.

 

[DJMK4]

As you only really need £2.9k have you spoken to your bank to see what other solutions they can offer. The two that immediately jump to mind are:
1) Tesco 0% purchases for 13 months card - you also get clubcard points on your purchases! - you could then move this to a balance transfer card at the end of the 13 months
2) Seeing if your bank will increase your overdraft to around £4k to give you headroom and then live in your overdraft until it's paid off.

Again bank I would rather not go down, it works out a lot more expensive and has higher rates than someone like Sainsburys Finance does, which is why I chose Sainsburys as they have one of the best rates around.

I need £5k so I have upfront funds to purchase a car, at the moment I only have £1k saved, the loan will be £5k, I can then purchase the new car, only then can I sell my old car and put a lump sum repayment back on loan.

 

[DJMK4]

What about the Tesco 0% credit card solution then? It's going to be much much cheaper than a loan.

I will have a look, depending on how long its 0% for, and also what the credit limit is.

I would need a £4k limit which I doubt the card will offer

Reason I would rather get a loan, is that its a contractual agreement, the repayments come straight out of your bank, and you cant re-use the funds, a credit card, I can repay back to it, then re-use the card, even if I cut up the card, I can order another one.

Credit cards are a bad move for me from previous experience.

 

[DJMK4]

In your previous post on this subject I replied:
"Sainsburys will allow you to overpay any particular month if you have extra funds.
It won't affect your fixed monthly amount but it will reduce the term of the loan.

I've just spoken to an advisor."

I had a very clear conversation with 2 advisors one of whom was obviously a more senior manager.

Cool

Thanks, I clearly got confused by the guy going on about 1/4 payments, 1/2 payments, 3/4 payments, do you know what he meant by this?

 

[DJMK4]

IIRC, a lot of places won't take a credit card payment for a car.


As far as I'm aware the 1/4 etc they are talking about means that you can only resettle the loan 1/4, 1/2, or 3/4 of the way through the term of the loan and normally they charge you a couple of months interest for the privilege.

Cool thanks, looking at my finances, If I take out the two year option, im probably looking at either clearing after half the term (1 year) or 3/4 of the term.

 

[DJMK4]

I have just applied for a Tesco 0% credit card for 13 months

Credit Limit £2k however it CAN be raised

Brillo Pad

Time to shop for some cars, combined with my savings I should have around £4.5-5k

 

[DJMK4]

I'd like to ask a question about this. I have several smaller direct debits that have interest to be paid on them e.g. car insurance, car warranty, store credit etc. Could I apply for this card, use it to pay all of my smaller things off and then actually SAVE money by not being charged interest on this Tesco card, as long as it is cleared before 13 months??

Im not 100% sure on this unfortunately

 

[DJMK4]

I have a question about buying a car with a credit card, as this is a 0% interest card on purchases for 13 months, or balance transfers for 9 months, would this limit me to only being able to purchase from a garage with a card machine? What if I found a car privately?

 

[DJMK4]

You asked the same question in Motors, where it has been answered. Why ask it again, did you not like the answers?

Not sure, I think it might be because of the opinions on the General Discussions about the card itself and Motors about the cars and purchasing, Sorry if I fluffed your tail too hard

 

[DJMK4]

Just irritating when you waste your time answering somebodies question exactly, only to have them totally ignore the answer and go on to just ask the question again somewhere else 15 minutes later

How can I make this up to you

 

[DJMK4]

Do you take card?