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  • FIRST POST
    • Desperadoo
    • By Desperadoo 11th Jul 17, 12:09 PM
    • 29Posts
    • 55Thanks
    Desperadoo
    loan to pay off credit cards HELP
    • #1
    • 11th Jul 17, 12:09 PM
    loan to pay off credit cards HELP 11th Jul 17 at 12:09 PM
    i have approx £20k of credit card debts. minimum payments are £665 per months and i know going to take forever to pay them off :-( most are apr off abput 21%-23%

    i have been offered a personal loan in principal of £20k apr is 14.6% and monthly payments will £382 over 7 years .

    I really cannot see me every paying the cards off any other way , not sure what to do
Page 1
    • heartbreak_star
    • By heartbreak_star 11th Jul 17, 12:17 PM
    • 7,492 Posts
    • 16,447 Thanks
    heartbreak_star
    • #2
    • 11th Jul 17, 12:17 PM
    • #2
    • 11th Jul 17, 12:17 PM
    What do you mean "you have been offered it"...?

    HBS x
    I believe in ordinary acts of bravery, in the courage that drives one person to stand up for another.

    #JC4PM
    • Desperadoo
    • By Desperadoo 11th Jul 17, 12:24 PM
    • 29 Posts
    • 55 Thanks
    Desperadoo
    • #3
    • 11th Jul 17, 12:24 PM
    • #3
    • 11th Jul 17, 12:24 PM
    What do you mean "you have been offered it"...?

    HBS x
    Originally posted by heartbreak_star
    Sorry what I applied and the company rang to check a few details and loan has been offered in principle i just need to send off bank statements
    • T9090H
    • By T9090H 11th Jul 17, 12:29 PM
    • 25 Posts
    • 7 Thanks
    T9090H
    • #4
    • 11th Jul 17, 12:29 PM
    • #4
    • 11th Jul 17, 12:29 PM
    Sorry what I applied and the company rang to check a few details and loan has been offered in principle i just need to send off bank statements
    Originally posted by Desperadoo
    I think that's a poor deal. £382 a month for 7 years equates to £12,042.68 in interest totalling £32k you would pay back. I would look elsewhere personally.
    • StopIt
    • By StopIt 11th Jul 17, 12:31 PM
    • 670 Posts
    • 614 Thanks
    StopIt
    • #5
    • 11th Jul 17, 12:31 PM
    • #5
    • 11th Jul 17, 12:31 PM
    How much extra interest are you paying for this loan over the term?


    First the "lower" payments are not going to help you frankly.


    14.6% APR over 84 months works out at £12,000 interest, so check your paperwork.


    Also, using a calculator, paying £665 on your credit cards will clear the debt in 45 months approx at 22% APR (Averaged your cards APR to do this) and pay a lower amount of interest.


    This loan gives you lower monthly payments but doesn't save any money and means you're in debt for longer.


    Get to the DFW boards and find ways to snowball the debt. With some tweaks you'll be able to pay the cards off faster and pay les interest. Apply for 0% Balance transfer cards rather than a loan and any you do get will negate some of the interest payable.


    Don't do it.
    • T9090H
    • By T9090H 11th Jul 17, 12:34 PM
    • 25 Posts
    • 7 Thanks
    T9090H
    • #6
    • 11th Jul 17, 12:34 PM
    • #6
    • 11th Jul 17, 12:34 PM
    [QUOTE=Desperadoo;72821756]i have approx £20k of credit card debts. minimum payments are £665 per months and i know going to take forever to pay them off :-( most are apr off abput 21%-23%

    If you overpay £250 a month on the proposed loan it would reduce term to 3 years 5 months and save you £6,600 in interest meaning you would payback £25.4k
    • Desperadoo
    • By Desperadoo 11th Jul 17, 12:34 PM
    • 29 Posts
    • 55 Thanks
    Desperadoo
    • #7
    • 11th Jul 17, 12:34 PM
    • #7
    • 11th Jul 17, 12:34 PM
    How much extra interest are you paying for this loan over the term?


    First the "lower" payments are not going to help you frankly.


    14.6% APR over 84 months works out at £12,000 interest, so check your paperwork.


    Also, using a calculator, paying £665 on your credit cards will clear the debt in 45 months approx at 22% APR (Averaged your cards APR to do this) and pay a lower amount of interest.


    This loan gives you lower monthly payments but doesn't save any money and means you're in debt for longer.


    Get to the DFW boards and find ways to snowball the debt. With some tweaks you'll be able to pay the cards off faster and pay les interest. Apply for 0% Balance transfer cards rather than a loan and any you do get will negate some of the interest payable.


    Don't do it.
    Originally posted by StopIt

    thanks will check the apr etc and use the snowball calculator before I sign any paperwork
    • StopIt
    • By StopIt 11th Jul 17, 12:39 PM
    • 670 Posts
    • 614 Thanks
    StopIt
    • #8
    • 11th Jul 17, 12:39 PM
    • #8
    • 11th Jul 17, 12:39 PM
    thanks will check the apr etc and use the snowball calculator before I sign any paperwork
    Originally posted by Desperadoo
    It's a common trap people fall into.

    Credit Cards often have a higher headline APR, but longer term loans can end up costing you more.


    Again, look for any balance transfers you can and snowball the cards. A loan will, to use the same term I used with someone else asking the same, be a case of Extend and Pretend.


    Extend the time in debt, and then pretending it's clear, leading to inevitable use of the Credit Cards once the next emergency hits. Then you'll be in CC debt and have a loan.
    • PeacefulWaters
    • By PeacefulWaters 11th Jul 17, 1:27 PM
    • 6,572 Posts
    • 8,059 Thanks
    PeacefulWaters
    • #9
    • 11th Jul 17, 1:27 PM
    • #9
    • 11th Jul 17, 1:27 PM
    I think that's a poor deal. £382 a month for 7 years equates to £12,042.68 in interest totalling £32k you would pay back. I would look elsewhere personally.
    Originally posted by T9090H
    It's a better deal than sticking with 20% plus credit cards.
    • DCFC79
    • By DCFC79 11th Jul 17, 2:24 PM
    • 29,519 Posts
    • 18,661 Thanks
    DCFC79
    How was the 20k built up and will it happen again ?
    Je Suis Charlie
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