A reader from London is looking to get a loan and is wondering what is really offered by a cash-back deal.
Jo Crosse, Halifax and Bank of Scotland personal loans expert, tackles the problem.
Martyn from Beckenham asks:
I am looking for a personal loan to buy a car for my wife’s birthday.
I’ve noticed some deals giving borrowers ten per cent interest cash-back once the loan is repaid.
These sound too good to be true – are they?
Interest cash-back loans do exist, however, you will probably need to fulfil certain conditions in order to get the interest cash-back: the loan may be for a minimum period, not repaying the loan early, not going into arrears or missing or making a late payment.
The cash-back may be calculated as a percentage of the interest charged (not as a percentage of the loan). You may also be charged a higher rate of interest for the privilege of the cash-back reward, so you’ll need to work out whether the cash-back is greater than the extra interest you might have to pay.
You’ll need to check out all the conditions of the loan before deciding whether this type of loan is best for you.
If you have a question for Jo, go to the myfinances.co.uk Ask the Loans Expert section.
Or for more information on your loans options go to personal loans at Halifax.
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