donnie darko said:
thanks for your help. one more thing, the interest rate is 10.3 isn't it suppposed to 0.5 at the moment??
0.5% is the Bank of England base rate, when borrowing money to a greater or lesser degree this is irrelevant. Firstly, dependent on the "financial soundness" of the institution you are borrowing from you have to look at how much they are being charged to buy money in. This is generally what you hear as LIBOR (London Inter-Bank Offer Rate) which for 3-month money is about 1.3%. This is the rate banks lend to each other at.
However, some institutions that have been in financial difficulty may be charged more than this. I know for instance one Bank that is paying nearer 3% for its money (and some are more). So this is the "cost" of your money to them. Then it depends on how much it costs them in overheads, staff, processing, branch network etc. This may add another 1-1.5% to the interest.
Finally they will assess the "risk" of lending the money to you, and your credit worthiness. In the current economic times financial institutions are being very harsh in this respect (to a certain extent you are paying for the loans they think are gonna go bad), in many instances they are just saying a straight no.
So all in all its highly unlikely that you would get finance at less than 6% approx anywhere taking all the above into account. While 10.3% does seem somewhat high at the minute even getting finance is difficult and to many people the rate is secondary.
i worked out that 4.9 flat rate is actually quite good over 3 years. the amount of interest i would pay over the 3 years worked out almost exactly the same as 6% apr, which is good.
