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Original poster

Would you do this with a loan?

20 replies

Wouldyoudoit · 15/01/2008 11:58

Have changed names as quite alot of details here.

I have some debt which I pay every month, was thinking of consolidating the debt into one loan, debt is this -

Credit card - £1400 interest free till august 2008 - Pay £50 per month.

Loan - £2850 pay £100 per month

Store card - £694.00 pay £70 per month (interest on this)

Car loan from family £900 left to pay - pay £80 per month.

Also would get rid of £800 o/d

So each month paying out - £300

Now the loan is for £7000 but the interest rate i can only get is 13.9% this would be paid back over 60 months (5 years)

So should i go for this or not?

Have papers ready to sign.

Is this sensible or not?

OP posts:
Original poster
Wouldyoudoit · 15/01/2008 11:59

Should have said the loan for £7000 would be £163.00 per month.

OP posts:
RubyRioja · 15/01/2008 12:01

This reply has been deleted

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mumblechum · 15/01/2008 12:01

That interest rate seems quite high. Would it not be better to increase your mortgage, then overpay if poss?

NoIHaventChangedMyName · 15/01/2008 12:02

Have you looked on Martin lewis money saving expert? He is very good about debts. If you have a good credit history another 0% creditcard would probably be a good plan.

Original poster
Wouldyoudoit · 15/01/2008 12:02

Sorry don't have a morgage i rent, not against my home.

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FlllightAttendant · 15/01/2008 12:03

Very high rate imo. Natwest is my bank and their rate over 10,000 is around 7 percent. Don't do it - find a cheaper provider.

Original poster
Wouldyoudoit · 15/01/2008 12:03

I don't have bad credit but i don't seem to be able to get things, i get offered some things but also get turned down.

The loan is with the Royal bank of scotland.

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Original poster
Wouldyoudoit · 15/01/2008 12:04

If i could get 7% then great but i don't seemt o be able too.

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RubyRioja · 15/01/2008 12:05

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titchy · 15/01/2008 12:08

Interest rate is very high - I'd keep shopping around. Also if you are managing to pay £300 a month in repayments at the moment can you keep this amount for the loan and reduce the term. Loans only work if they continue to be your only debt. Bo brutally honest - in 5 years do you really think you would never have any credit or store card debt ever again?

hanaflower · 15/01/2008 12:08

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sweetheart · 15/01/2008 12:10

I haven't got much time to post but my initial thoughts are:-

why get a £7k loan when the debts only add up to £6,644. If your gonna get a loan I'd get a £5500 loan so the interest is less. The car loan to family is interest free so point in paying interest on this. Also you can pay about £400 off the credit card between now and August interest free too so if you get a loan only get enough to pay £1000 off your credit card. The rate does seem high too - best to shop around for a better rate!

sweetheart · 15/01/2008 12:13

Also with the credit card you can do a thing called "tarting".

Rather than clear the balance with a loan of 13.9% make repayments until the 0% offer runs out then transfer the balance. The cost of this is normally 2% of the outstanding balance which is alot less than the loan rate.

TBH - if I were you I would not sign those loan forms - I'd rip them up and sit down to work out a better way of managing your debt.

Original poster
Wouldyoudoit · 15/01/2008 12:14

The whole idea of the loan is to bring the monthly amount down as it's a massive struggle at the moment & i can't afford it, this is the only reason i am trying to do this, also circumstances are changing so it is going to get worse, so before this happened i thought i would try to get the monthly amount down.

I see what your saying sweetheart but if i only pay those things off then i would still have to make a monthly payment to the credit card & the car payment to family so would not be much point?

Not sure where else to apply, i have tried egg loans but they said no, shall i try again somehwere else & how many times, i don't want it to go against me IYKWIM?

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Original poster
Wouldyoudoit · 15/01/2008 12:16

The cards will be cancelled & cut up so i won't be using them EVER again, i can't afford to i can assure you of that.

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hanaflower · 15/01/2008 12:19

This reply has been deleted

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Original poster
Wouldyoudoit · 15/01/2008 12:30

Will stop now but only have about 2 months to sort this out, am looking through all the link's.

Have to keep paying family, they will feel very betrayed if i go back on my word so no point in even thinking this, it was hard enough borrowing the money to be honest.

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lizziemun · 15/01/2008 13:11

If you do decide to do this then i would suggest that you get rid of your credit card and store card so you are not inclined to spend on them and get into more debt.

lostittoday · 21/01/2008 22:29

Well if if you carry on as you are do you expect to be debt free in 5 years.

If you don't then I would say to take out a loan but I would shop around for a lower interest rate.

Also if you do take out a loan will you be able to resist buying on on your credit and store again if you don't think you can then it would be pointless having the loan.

I agree with lizziemun that you would then need to get rid of your cards to make it worthwhile.

Quattrocento · 21/01/2008 22:37

NO NO NO

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