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Loans V Credit Card

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crisp02
crisp02 Posts: 19 Forumite
3 years ago i took a loan out from Halifax bank of £3000 over 5 years at £75 per month intrest payment,i now find out the loan debt as reduced to £1,270 over time but i am still paying £75 pounds a month for such little debt.If i used a credit card to pay this off, would the interest be cheaper, i am a complete dummy when it comes to credit cards, and i have never used one.could i juggle the credit cards.can someone on here give me advice on the best way to reduce the debt, there must be a cheaper alternative.Many thanks
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  • mrcow
    mrcow Posts: 15,170 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Well your original loan was for a massive 18% APR, so yes, you can save yourself money going elsewhere.

    If you could put the money onto a 0% credit card for example then you would save over £500 in interest payments and possibly pay it off in 17 months instead of 24. It's not as simple as that though as you'll probably need to pay a balance transfer fee on your new credit card. You must not touch the credit card either for other spending or you'll ruin your 0% deal.

    Is £1250 the actual settlement figure on the loan? If not, you need to call Halifax and get that first and then take it from there.

    Then take a look on the credit card boards for a card that will do a 0% "super balance transfer" ie: cash into your bank account and then see if you can apply for one with perhaps a Quidco cashback deal or similar.
    "One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
    Because by then you've blown your chances. That's it."
  • Thanks for your replyNot sure what the settlement figure will be, but its showing 1,270 left outstanding, its crazy really i am paying £75 pounds a month for debt which has shrunk,i probably could get a larger loan that pays back the same amount,but i thought a credit card could fix the problem, but i dont now how they function,but im sure it will be cheaper long term.
  • mrcow
    mrcow Posts: 15,170 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    I think you are getting confused.

    A loan repayment amount generally stays the same throughout the term.

    You signed up originally to borrow £3000 and pay back £4500 for the priviledge. This amount is essentially split over the period so all montly payments are the same. You don't have a reducing premium as the years go by.

    As for getting a larger loan - are you crazy? What on earth for? You'll be forever in debt if you that.

    If you don't know/understand how credit cards function then stay away from them. You will only end up in trouble.

    If you want to save yourself some money, start puttng some extra money into a savings account and then, when you have enough to settle your loan, do so. If you don't understand finance, then the best way is to avoid it completely and don't borrow any more again.

    You've been ripped off with this one, don't fall into that trap again.
    "One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
    Because by then you've blown your chances. That's it."
  • Thanks for you're replyit was the devil i had to have at the time due to a split with a greedy ex, I have found my agreement, i borrowed £3000, total payback £4.468 at £75 a month APR 16.9, i am now 3 years and 7 months into the debt, surely there is a way out of these payments by settling.
  • mrcow
    mrcow Posts: 15,170 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Okay, I thought you said you had two years left, when you only have 1 1/2 years. You may not be better off settling it.

    Your first move is to contact Halifax and get a settlement figure. Then post back here with the figure and we can run through the maths for you if you like?

    At the moment, you have £1275 in payments to make. If the settlement figure is not much off this, you may be best off just letting the loan run its course now.
    "One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
    Because by then you've blown your chances. That's it."
  • Thanks MRCOW, i will ring them later, what i am saying is why pay £75 pounds on just say £1.250, when i could be paying the same on £3000 and releasing money for myself, i don't mind paying on another loan as long as its a similar amount, my car is on its last legs, so i could release funds for that.contact this thread later.
  • shellsuit
    shellsuit Posts: 24,749 Forumite
    Part of the Furniture 10,000 Posts Photogenic Combo Breaker
    Tank fly boss walk jam nitty gritty...
  • Yes i put it on 2 threads, because the response was slow earlier, i have had some good replies, from both sides, many thanks.
  • mrcow
    mrcow Posts: 15,170 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    crisp02 wrote: »
    what i am saying is why pay £75 pounds on just say £1.250, when i could be paying the same on £3000 and releasing money for myself,

    You are not "releasing" money!!!

    What money do you think you are "releasing"? It's not your money! You will have borrowed it and will have to pay it back, plus a lot extra on top.

    You have already paid £1500 in interest in the past 3 years. That money was your money that you could have spent on whatever you wanted and you have given it to Halifax.

    Why would you want to repeat the process for no good reason?

    If you like to give away money for no reason, chuck some in my direction!
    "One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
    Because by then you've blown your chances. That's it."
  • OK then, does it make sense to get a settlemant figure and try and pay them off, or just carry on paying the £75 pounds a month, or use my overdraft facilty with HSBC to pay the rest of the debt off with halifax, what do you think.
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