Too late to fix a bad loan?

[Baaahbaaahbaahh]

I recently took on a loan with a very high interest rate. I’ve learnt annoyingly after the 2 week cooling of period I would have been eligible for a much lower rate at a different lender. I could I still fix this by taking out a loan with the lower rate lender and paying of the higher rate loan or am I stuck with it now?

Would there be an early repayment penalty?
Would you even get offered/qualify for the other loan so soon after the 1st one?

You need to read terms of original loan. It is likely that you're stuck with paying full amount of interest regardless if you pay it back early. How much us % rate and full £ value of loan with interest?

It was for £14000 I went with my bank which offered a rate of 11%. Tesco approved my application for 4%.

Iv recently done this exact same thing and I'm gutted 😳 I'm paying so much over the odds! I was hoping I'd be able to get another lower interest loan and pay off the first but I don't know if I can.

This section is about repaying the loan early, it looks like I would have to pay the total plus total interest

It’s absolutely devastating isn’t it? I hope you manage to sort something out. I think I worked out I will pay about £6000 more interest than I need to

I think those terms say that you would have to pay the balance plus 58 days worth of interest because of the rebate stipulated by the quoted Act?

I agree the first part seems to say you'd have to pay the balance plus all the interest, but then the next two sentences about rebates seem to say that the interest is limited to 58 days?

Now you have the loan you may find that you can’t get another one.
I know you say you would use the new one to pay the existing one but they don’t know that.
Unless the Tesco one was approved after you got the first one

Hang on sorry. Can someone help me understand this. I just ran an early settlement quote for the loan and it looks like it’s not all payable. It’s valid for the next 30 days. So if I was able to get a loan at a lower rate I could use it to pay off this one?

So it wouldn’t matter that it was already approved with Tesco? They are at the point of sending me the contract to sign. Would they do additional credit checks at that point?

It does mention a rebate where they only charge you 58 days worth of interest.

Will you definitely still qualify for the other loan though?

Yup, looks like it'll cost you £500 to get out of it.

Yes that’s the bit I can’t work out. It’s been approved. So do they do additional credit checks between approval and payout?

You'll need to find out what the early repayment sum is. Most banks will do this on phone. As for cheaper loan with tesco - they won't care what you use money for. And please always use comparison sited (Martin Lewis one is good).

Would I need to tell Tesco about the loan I have with bank? And ask them to reassess my eligibility? Or not say anything as I’m going to pay first loan off with second?

I wouldn't as you're going to pay it in full as you start new loan. The reason for your tesvo loan would he consolidating other loans/debt which is good financial practice demonstrating you arrange watching your money.

If they do a credit check it will show up

That sounds like it will work out ok OP.

Yes I know but I assume they’ve already done a credit check to approve me? So would they do it for a second time after approval?

Just crack on and answer the question if asked.