Can I cancel car finance within 30 days and pay in full?
December 2, 2008 - I have recently (in past few days) bought a car on finance over a four year period and now realise the apr is high and would rather pay for car straight out with a loan and lower apr. Am i able to do this without paying interest?
AND if i do will it give me a bad credit rating to cancel it?
- Phone the CAB straight away. They have up to date info on law. BTW, your avatar looks familiar.
I have actually done that, as long as you pay off the loan it will be reported as paid as agreed on your credit report. It will show your original high balance the date it was opened and it will show the date it was paid off and a zero balance. It will not hurt your credit. If this is your only trade line it just won't show a payment history.
Yes you can do that. Its a simple interest loan so that means you can pay as much as you want or pay it off whenever you want without being penalized. You are gonna pay some interest though. Interest starts the day that you buy that car so if its within 30days i cant imagine the interest charge to be more than a few bucks, depending on the interest rate and the amount of the loan. Say you bought a 80k car with 12% interest than yeah within that 30 days its gonna quite a bit. But say around 20k at 12% wont be more than 80 bucks.
- Most finance companies don't have an early loan termination fee but some do. It is best to call your financial institute to see if they will charge a large fee to cancel the loan early.
- It doesn't sound as though that you have the cash to pay off this car loan, so it makes me wonder why you think you can go from a high interest loan to a lower interest loan in just a month. Unless you can "walk on water" I don't see your situation changing any to soon.
- best thing to do would be to call up the company and ask them. If you do have to pay interest u will still save - i paid off my finance after about 6 months and i saved a lot doing that.
You won't be canceling it, you'll be paying it off. You will still have to pay interest on the money you borrowed for 30 days. Won't hurt your credit. But applying for another loan while this is still active (which it will be until it's paid) may ding your credit, but not enough to be of concern because you will be paying off the 1st loan early. To estimate the interest you'll pay the first month: (interest rate / 12) * principal
- best ask the company you took finance out with.
- you can do that, it wont hurt ur credit
Yes there will be a cooling off period under FSA regulations - they should be able to do that - although it will mean the supplying dealer will loose his/her commission for introducing you, so don't be surprised if they try to tell you otherwise. Also the only way it could possibly affect your credit rating is that it will not have had time to register an account with Experian / other credit bureaus BUT the original search will still show - meaning it could look like they refused you credit to a future lender - but this doesnt really mean anything unless you did it often so dont worry about it
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