Hire Purchase or Personal Loan

C

cruchan09

Registered User
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110
Hi All,

I need some advice on car finance. I have gotten approval for two finance options to purchase a new car. Both options offer €28k over 5 years at 7.02% Interest (7.25%APR). However one is a personal loan and the other is a HP agreement. Obviously if I pay off either loan over the full 5 year period there will be no difference in the amounts being repaid. However if I decide to pay off the loan after three years with a lump sum I was under the impression that the HP loan would be more expensive to clear than the personal loan as HP agreements are front loaded with the interest whilst personal loans only calculate interest on a monthly or quaterly basis. However the person trying to sell me the HP has indicated that this is not the case. I need some advice from an impartial body. Please help.
 
Never take anybody's word when it comes to how/when interest is calculated/added. Ask to see the contracts. This area is a minefield and the finance companies are milking what they simply see as suckers.
 
Thanks for that. Just a quick question to CCOVICH, for my own future reference why do you suggest the loan as opposed to the HP?
 
It is far more straighforward. You borrow the money, buy the car, the car is yours. It's not that simple under HP.

There is a good summary here.
 
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