Is it worth swapping?

mattp_3 · 25 May 2005 at 11:54AM

I currently have a loan with Cahoot (6.9% APR) with £8999 outstanding (settlement figure) - I currently pay £297.53 per month and have 32 months left to pay (would cost me £9520.96 to stay with them to the bitter end).

The problem I have is that I need to get a mortgage and the monthly repayments to my loan affect the amount I can borrow - they deduct £297.53 x 12 (£3570.36) from my annual salary before calculating how much I can borrow.

Obviously I need to borrow as much as possible to stand a chance of getting a property in the UK (Don't get me started on that topic!!)

But if i borrow £9000 from A&L at 6.4% it will cost me £175.07 per month over 5 years - but that means I repay £10,504.20!!!

Surely this doesnt make sense? I would need to spend another £1000?? :mad:

Any ideas on alternative solutions ???

fatboyonadiet · 25 May 2005 at 1:58PM

Probably does, your spreading the payments over a longer period of time and hence paying more interest. Try getting a Life of Balance card, tend to be 1.9%, 2.9% and 3.9% and switch the loan to this, thus reducing your interested paid, you could try paying off extra some months to get rid of it quicker, you will need a mule card that allows Super Balance Transfers. Other option is to get 0% cards and keep switching the balance every few months.

MarkyMarkD · 25 May 2005 at 9:09PM

Consolidate the loan onto the mortgage - hence no reduction to your income, just a slightly higher mortgage. If you want, pay the same amount off the mortgage as you would have done on the loan >>> no increase in total amount payable (in fact, a reduction as the mortgage rate will be less than the loan rate).

Refinancing the loan to another personal loan is a bit of a waste of time IMHO.

Is it worth swapping?

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