£4600 @ 18% Apr - help me reduce it!

peasantboy

Hi there,

About 6 months ago I consolidated my previous loan and my credit debt and was set-up with a new loan at 18% APR (Lloyds Cashback loan). I didn't particularly mind at the time because I was earning enough money to be able to pay off the loan within 6 months. And it worked out I would be better off with this option at the time.
Now my circumstances have changed and I can't meet that goal due to being made redundant and now I have a new job where I don't earn as much as I did before.

Do you think I could renegoiate a new loan with my bank? Or should I take out a loan with someone else at a cheaper rate to pay this one off?

I don't know what's the best plan of attack on this.

Any advice is much appreicated.

TIA !

spammylou

Firstly, have you asked them for a settlement figure? You should be able to reduce the whole amount dramatically by repaying it early, providing there are no early repayment charges!

Secondly, did you get any money from your redundancy? If so you could repay it as per above

Thirdly, do you have a credit card that will offer you a balance trans at a good rate? there are plenty about if not and it may be worth you applying if you don't have one. My advice once taken out cut up the credit card and make sure you repay as much as possible each month. Try Quidco and you may also be able to get cashback or some other deal by applying for a card thru their site.

Good luck.

poorandindenial

hi peasantboy

slightly personal question, but are you able to meet the repayments? could you overpay?

if yes then I assume (based on the APR of the loan) your credit rating is shot?? how long since you last applied for a loan or any other type of credit?

peasantboy

poorandindenial wrote: »

hi peasantboy

slightly personal question, but are you able to meet the repayments? could you overpay?

if yes then I assume (based on the APR of the loan) your credit rating is shot?? how long since you last applied for a loan or any other type of credit?

Yea, I've no problem meeting the repayments.

I cancelled my credit card back in March / April time. I've just been using my debit card for purchases.

My original loan was at 7% but I had £2000 in debt on my credit card which had a silly rate on it. So it worked out cheaper for me to consolidate those two into a new loan based on how early I would be paying it off. Plus there isn't any additional charges, I can pay it back whenever.

CLAPTON

seems somewhat bizarre to refinance a 7% loan with a 18% loan

but essentially, yes if you can get a lower APR loan and your current one is flexible then you will save money.

Not knowing your circumstance however, I would normal say it's best to keep a credit card, use it regularly always pay in full each month... this usually enhances your credit rating.