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    • 82alan82
    • By 82alan82 5th Jan 18, 4:15 AM
    • 2Posts
    • 0Thanks
    What to do
    • #1
    • 5th Jan 18, 4:15 AM
    What to do 5th Jan 18 at 4:15 AM
    Hi Folks

    Looking for some advice.

    I am looking to get a loan of £25000 and pay back over 5 years for home improvements.
    The best APR I have been quoted is 12% which seems very high (Approx £7000 extra)
    My credit score with experia is 961 which is just in the excellent category.
    I do have a little out standing debt but my affordability is very good.
    The debt I have is £4500 on a loan and £8000 on credit cards, no mortgage as I have paid this off in 2016.
    I also have savings of £12000 (but need £30000 in total so will be using £5000 of this)

    why would the interest rate be so high? every thing on credit file looks good. should I pay off some existing debt with savings? what would be best to pay off loan or credit cards?

    Should I think about a secured loan? How do these work?

    Any help would be great

Page 1
    • Arleen
    • By Arleen 5th Jan 18, 5:24 AM
    • 1,141 Posts
    • 861 Thanks
    • #2
    • 5th Jan 18, 5:24 AM
    • #2
    • 5th Jan 18, 5:24 AM
    There are no easy fixes here, they see you as 12% risk so that is what they've offered you. Can be your job, can be your income, can be anything else, no one can tell.

    A secured loan is a very bad idea, as you are essentially putting the house on the line and if anything goes bad, they can go after it. A better option is to just save hard and do the works when you can.
    • BoGoF
    • By BoGoF 5th Jan 18, 6:15 AM
    • 2,968 Posts
    • 2,230 Thanks
    • #3
    • 5th Jan 18, 6:15 AM
    • #3
    • 5th Jan 18, 6:15 AM
    Your 'score' of 961 means nothing.

    You say you have little debt, then say it is £12,500. What is your income? If you have no mortgage for the last year why do you even have debt - is the credit card debt 0%?

    There is little point having savings if the interest earned is less than you are paying on your credit.
    • 82alan82
    • By 82alan82 5th Jan 18, 6:43 AM
    • 2 Posts
    • 0 Thanks
    • #4
    • 5th Jan 18, 6:43 AM
    • #4
    • 5th Jan 18, 6:43 AM
    Income before tax is 60k (this includes shift allowances and overtime payments)

    Yes the Credit Cards are 0% so didn't see the point in paying them off.

    Your point about having savings and debt is a good one, I never really thought about too much before until reading some of the tips on this site

    • enthusiasticsaver
    • By enthusiasticsaver 6th Jan 18, 12:04 PM
    • 5,942 Posts
    • 11,806 Thanks
    • #5
    • 6th Jan 18, 12:04 PM
    • #5
    • 6th Jan 18, 12:04 PM
    I think the fact you have £12500 in debt is probably the reason the rate is not that good. Rightly or wrongly anyone who has £8k on credit cards (even if on 0%) may be seen as a bad risk. Do you have to do the improvements all in one go? I would break it into sections and do it a project at a time and also address the debt outstanding.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to
    • jonesMUFCforever
    • By jonesMUFCforever 6th Jan 18, 1:15 PM
    • 24,502 Posts
    • 11,771 Thanks
    • #6
    • 6th Jan 18, 1:15 PM
    • #6
    • 6th Jan 18, 1:15 PM
    OP you should take out a mortgage over 5 years.
    With 100% equity you should get a better rate than the best personal loan rate.
    What goes around - comes around
    give lots and you will always receive lots
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