Tips for loan!

[november90]

So basically tk cut a long story short, I have a loan which costs me £290 a month. It's very high interest and is £9000. I took it out earlier this year. I really want to transfer it to another loan with a lower j retest rate but I'm just not getting anywhere. I work PT but with my UC, wage and CMS I have an income of around £22000. No mortgage.
Does anyone have any suggestions on what I should do to reduce this?

Please be kind with your replies. I'm a single mum and I get really bad finial anxiety after being on the receiving end of finical abusive relationships!

Is it worth me sticking at the loan for 6 months or so and then search for another? When I search now I don't get any cheaper offers?

I don't have any family to help me and don't want to resort to a dmp as I don't want my credit rating shot!

Hi OP, are you struggling to meet the repayments or you don’t want to pay the very high interest? When you say you’ve no mortgage is that because you’re renting or you have a house without a mortgage?

The interest is probably high because it's from a subprime provider, you have a poor credit history, or look like on paper you overspend/mismanage your money, because if you have £22k coming in with no mortgage and presumably no rent, you should have plenty of money and be able to save, not need to borrow. It's hard to make all that sound kind, but it's how the banks will see you.

Have you actually tried to apply for a cheaper loan or a low rate credit card, maybe from your own bank who can see your income coming in every month? Sometimes the eligibility calculators are way off and only an actual application will tell what you will get offered.

Failing the above, you need to knuckle down and throw as much money as you can to the loan, so you overpay it and reduce the interest charged. Then it might be worth trying in the future in a year or two to see if a better loan is available then.

Have you had a really good look at your budget? It might be worth a year or two of frugal living free up as much money as possible to get shot of the loan. Short term pain for long term gain and all that.

Have a look at Moneysaving Expert for tips on maximising your income, minimising your expenses and seeing how much money you should have spare after you've paid your essentials. It might be more than you think.

www.moneysavingexpert.com/family/money-help/

Also sign up for the moneysavingexpert credit club (it's free). This links to your credit record and will tell you the likelihood of getting certain loans, what you can do to improve your credit rating etc. They will also email you every month when your credit record updates.

Do you have a local credit union, you may need to save with them for a little while before they will lend you that much but they are much cheaper then high street lenders and you save whilst your paying off your loan.

Don't keep doing credit searches as this will impact on your score and lenders will think your desperate for credit (lots of companies offer soft searches now that won't register)

I calculate that APR to be around 35% which is very very high as you say.

What is your credit rating / profile like?

What prompted you to get this loan at this rate, were you declined elsewhere?

Agree with above, if you can't get one of the main lenders, then a credit union is your best bet.

so basically i'm living at my parents so no mortgage or rent but i am really wanted to move out on 13 months time because there's limited space and i have 2 children.
i consolidated the loan so my payments were in one place as my ex left me in debt!
i can afford the repayments but when i move out i just fee i will struggle so ideally i want something less each month but i just don't know how to get approved or which avenue to take :(

So what are you currently spending your money on? Do you contribute to your parents for 'rent'? Or is it just food/travel costs?

Could they lend you the money for you to pay off the loan and then you repay them instead? Or even if they get a loan in their name to pay off your loan and you repay them?

If you can't do any of this, next step is to overpay the loan, if this is allowed and the interest is calculated daily, which it should be, because then you pay less interest as your balance goes down.

Or take a new loan out but over a much longer period (watch out there are no early repayment penalties on your existing loan. Maybe worth asking your existing lender if you can do this?

Also watch out that you can't get a better interest rate for actually borrowing a bit more. You usually get a better rate the more you borrow, so 10k rather than 9k may not cost you any more, although make sure you put the extra money to good use of course.

I’d stay living where you are until you have that loan cleared if I was you as you can’t afford to move out and pay rent. Throw as much money off it as possible. Like another poster said, have a very frugal year or two. Are you getting maintenance from your ex for the children? Do you have any capacity to increase your hours in work? It’s tough being in a corner like this but you can get out of it.

thank you all, I'm feeling a bit inspired and motivated after making this thread. I think what I'm going to do is try and pay a few thousand pound off the loan over the next 12 months and then hopefully maybe either get a interest-free credit card or much lower loan to cover the remainder. I wish it was an option for me to stay at my parents until I paid the whole thing off, however, there just is really limited space for me and my two sons in their house and it would just take too long for me to pay it off and then save up to move out as well. The lack of space and lack of independency is really affecting my confidence and relationship with my parents. I am so beyond lucky to have them and have them support me over the last few years, but I just really want to get going with my life.
my outgoings really are all the things for my sons, food, other small debts, phone, car, petrol, School. I do get child maintenance payments off my ex, however it is a minimal amount and doesn't cover much at all when you consider how much money we spend monthly on our sons. I know a lot of people are going to encourage me to take up CMS, and if I was responding to a thread like this I would probably suggest the same thing, however, I have been on the receiving end of a lot of emotional and financial abuse from this man and I just don't want to go down that road again. Last time I asked if we could review what he gave me he threatened to take me to court to take the children off me even more so he wouldn't have to pay me and I no he has it in him to do that so I just don't want to go down that road because it causes me too much anxiety!

any more tips on staying motivated are more than welcome ha ha!

Please don’t worry about the courts taking your kids off you because you asked for adequate maintenance for your kids. I’m in Ireland so I understand the situation may be different in the UK, but custody is taken from mothers only in extreme circumstances, I.e. prolonged substance abuse and neglect etc

thank you @BeeLady15. i've been told that if he wanted 50/50 he would pretty much be assured to get it. i have them 70/30 and my heart would shatter if i lost a minute more with them :(