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    • someheadwayatlast
    • By someheadwayatlast 10th Mar 17, 1:22 PM
    • 3Posts
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    someheadwayatlast
    Which debt to clear
    • #1
    • 10th Mar 17, 1:22 PM
    Which debt to clear 10th Mar 17 at 1:22 PM
    Hi


    For a number of years I have been paying off interest after interest but very little if any capital against credit card debt on 5 cards. Although I also have a personal unsecured loan which has been reducing as the mechanism pays off both interest and capital at the same time.


    I have been gifted half of what I owe, to allow me to get straight at last.


    I need to take full advantage of that very generous gift. It has given me a much needed new lease in life. This gift will allow me to either -


    a) pay off the entire loan and 3 of the lowest credit cards
    b) pay off the 2 highest value credit cards


    Which if any will get my credit worthiness up either now, or over the shortest time? As I still need to at some point, between now and 6-9 months, get to a position where I can apply for another loan, have NO cards and pay off what remains owed as quickly as possible.


    All, including the loan has a similarly extortionate APR rate. My plan, will be, to be, the best possible risk for a lender and thus secure the lowest APR loan as soon as I can


    I am fortunate enough to be a good earner and have NEVER missed a payment but alas this still remains a sizable position to resolve.


    Appreciate guidance and advice
    Thank you
Page 1
    • zx81
    • By zx81 10th Mar 17, 1:27 PM
    • 10,782 Posts
    • 10,686 Thanks
    zx81
    • #2
    • 10th Mar 17, 1:27 PM
    • #2
    • 10th Mar 17, 1:27 PM
    If rates should be the first priority - paying off the highest.

    If the difference is minimal, then I would look at which of the cards may offer a decent BT if you cleared the card.

    Failing that, if any of your cards are maxed, get them away from the limits.

    At the end of the day though, a lender will look at your total debt, limits and income. The precise distribution won't make much difference.

    If are looking to build a more solid credit history, remember to keep at least a couple of cards and clear in full each month.
    • someheadwayatlast
    • By someheadwayatlast 10th Mar 17, 2:12 PM
    • 3 Posts
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    someheadwayatlast
    • #3
    • 10th Mar 17, 2:12 PM
    • #3
    • 10th Mar 17, 2:12 PM
    Thank you zx81,


    Without wishing to have posted a lengthy thread, some of what you mention will be part of my strategy to be rid of this issue for good.


    a) Considering which card, once emptied, will offer me zero balance transfer
    b) The £600 per month saving by clearing the loan, will release that to attack the cards and also say the to the bank with whom I have been with for 29 years "Unless you help at this point (loan at great APR) I am leaving.


    With a) in mind, do you think approaching the lenders now asking whether they will offer zero or low APR for a period will work. OR is there a list of card / lenders which may bend over backwards to assist when they see an empty card?


    When I sit down with the bank next Tuesday I will be walking in with £,000's in my account and be as threatening as I can be about a new low loan or leaving but I suspect it will fall on deaf ears.


    The MSE credit clubs affordability and eligibility calculator has shown it might need a few more months to look good in their eyes. But me leaving will be their loss!


    Thanks Again
    • zx81
    • By zx81 10th Mar 17, 2:24 PM
    • 10,782 Posts
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    zx81
    • #4
    • 10th Mar 17, 2:24 PM
    • #4
    • 10th Mar 17, 2:24 PM
    No reason you couldn't ask your current cards for an offer - although this is more likely if you have cleared a balance. Barclaycard are typically the most likely to throw offers art customers.

    I wouldn't go too far with threatening the bank for a low rate loan. They'll score you according to their criteria and won't offer a lower rate than you merit - they'd get slaughtered for offering loans to customers who didn't merit one.

    Only burn your bridges once you know you haven't left anything you need on the other side.
    • Money Rollercoaster
    • By Money Rollercoaster 10th Mar 17, 2:49 PM
    • 196 Posts
    • 431 Thanks
    Money Rollercoaster
    • #5
    • 10th Mar 17, 2:49 PM
    • #5
    • 10th Mar 17, 2:49 PM
    It's not possible to predict which CC will offer you new 0% or cheap rate BTs.

    I don't think that you'll be able to threaten your way to getting a good rate through your bank or any other lender. You are inconsequential in the grand scheme of things (and I mean that in the nicest possible way) - we all are, pretty much.

    Post more information about the exact balances, the interest rates and the duration of any special deals / the loan and we can probably advise you better.

    Alternatively, plug the info into the snowball calculator and see what it says ...

    http://www.stoozing.com/calculator/snowball-calculator.php

    It allows you to input amounts for one off payments.

    It's worth thinking now, considering the situation you find yourself in debt-wise and the fact that you want to get straight at last, whether a further loan is the answer. It's possible that, having had 5 CCs and a consolidation loan at sub-prime rates, you'll probably continue to get offered less than stellar interest rates on your CCs / loans.
    Last edited by Money Rollercoaster; 10-03-2017 at 2:59 PM.
    Living Life @ 174 BPM >> CC Balance (0%) -£2,250 - Target DFD Dec 2017 >> Loan (Car) (3.1%) -£20,724.84 - Target DFD Oct 2020
    • Ben8282
    • By Ben8282 11th Mar 17, 5:45 AM
    • 1,628 Posts
    • 635 Thanks
    Ben8282
    • #6
    • 11th Mar 17, 5:45 AM
    • #6
    • 11th Mar 17, 5:45 AM
    On the subject of your bank, having thousands of pounds in your account is meaningless as any credit check will reveal debit balances of twice that amount. I don't really understand why you are going to see your bank on Tuesday; you will NOT be given a loan at a 'great rate'; in fact I doubt that you will be given any loan at all. Threats to take your account elsewhere will not get you anywhere. Also the bank may well ask you what you need the loan for as you have all those thousands of pounds in your account. If this amount that you will have in the bank is impressive, then your total debt must be impressive also if this amount represents only half of it.
    As you don't name the cards you have, it is not possible for anybody to give any indication of what offers you may get from these credit cards.
    The 'default' advice is always to pay off debt attracting the highest rate of interest first.
    • nic_c
    • By nic_c 11th Mar 17, 7:14 AM
    • 687 Posts
    • 433 Thanks
    nic_c
    • #7
    • 11th Mar 17, 7:14 AM
    • #7
    • 11th Mar 17, 7:14 AM
    Use it to pay off the highest interest, which I assume will be the cards.
    Why 6-9 months to get another loan? Your Credit report will show that just over the 6-9 months ago you had high balances on your credit cards. Loans you HAVE to pay off at a fixed rate so the fact that you have been paying capital and interest is irrelevant as that's how they are designed. Credit cards are designed to allow you to pay a minimum that may well be mainly the interest and hardly any capital, and that's what it seems you have been doing.

    Some cards offer a 0% BT, but ideally you would want this for over a year in length as there is the BT fee to take into account. Some also offer low %age BT's with no fee - this is essentially like a loan, though you need to be disciplined enough to make enough payments on it as you would a loan and not just pay the minimum
    • someheadwayatlast
    • By someheadwayatlast 11th Mar 17, 6:11 PM
    • 3 Posts
    • 0 Thanks
    someheadwayatlast
    • #8
    • 11th Mar 17, 6:11 PM
    • #8
    • 11th Mar 17, 6:11 PM
    Thank you all for your replies.


    Ben 8282 thank you for yours in particular, I appreciate I don't sit in nor should act like I am in a bed of roses, it is true that the amount I owe is impressive, that the amount sat in my bank account at the moment is impressive and fortunate for me, the amount I earn is also so.


    I am also no fool hence why it is so frustrating that I am sat in this position, which I will climb out from whatever now happen. I think you are right, the bank isn't going to do a lot this Tuesday, in fact I am expecting they won't. When they won't it will be a little bit of satisfaction for me, to also be taking my business elsewhere.


    The only bit that concerns me a little is what appears to be a view or 2 that in 6-9 months time, I may not be able to source a loan at an acceptable rate. Yes it will be debt consolidation and I will openly say what its for. (People get into debt for all sorts of reasons and come from all walks of life.)


    Even now, 2 of the credit card providers have increased their limits to me recently and as I said before, I have never been unable to pay them on time and often with a greater amount than was the minimum. So I don't think I am a terrible risk and having been an otherwise good citizen, would be surprised if they drag up what may have been my situation 6-9 months prior. But this is the start of the journey for me, making "someheadwayatlast"


    I wish anyone in my same position, or worse, all the best that they can do to get themselves out of it. If mine is never a loan again and just resolving the cards, sobeit
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