Clearing debt: Re-mortgagae / 0% Balance transfers / Personal Loans. Please recommend


As per my previous thread regarding balance transfers, which were gracefully received. I have another. After some deliberation with my partner it has been unveiled that Me & my partner have managed to get into a debt of £18,000 pounds. The debt comprises of Student overdraft, controlled overdraft's and Personal Loans.

As we are paying high interest on the payments we were looking for ideas to consolidate the debt. The first option was to re-mortgage the house, the price for the house is roughly £60,000 less than what we paid, therefore the bank has confirmed we can re-mortgage the house for personal purposes for the amount required. (So negative equity does not apply to us).

The second option was to try applying for a 0% Balance Transfer and try to transfer approx £4000 and transfer the remaining on our re-mortgage. Courageously and being realistic we could pay off £4000 pounds within 12-14months. This would give us a chance to pay off a lump sum without paying interest on the re-mortgage option 1. Would it be wise to do this? Or would you recommend an alternative option? i.e. low APR personal loans, if so which ones would you recommend?

Your feedback would be most definitely valued.


  • sarahs999
    sarahs999 Posts: 3,751 Forumite
    If you can get a 0% BT and pay it off in tiem (or transfer to another one) that is by far the better option. If you put it on your mortgage you wil be paying the interest for the next £20 years or so, so it will cost you a HUGE amount overall. Have you any credit cards at the moment? If not it might be hard to get a high enough credit limit, but anything you can put onto 0% is obviously going to help. I expect someone else can advise you on alternative options. I've been tarting at 0% for about five years now and am slowly clearing debts, but I have a very good credit rating. Might be worth having a look at your credit file?
  • nrashid
    Thanks that sounds like the best option at the moment. As a quick turn around re-mortgaging sounds like a less stressful option but on the long run it can get very expensive as you mentioned.

    I will most definatley look into the option 0% BT's. Is it normal to have more than one 0% BT? In the case of a credit rating being average/good does anyone know what the maximum amount would be that people have transfered over?

    Which top 5 0% BT's would be the best keeping in mind handling charges, Repayments, APR etc?

    Cheers Sarah for your feedback
    CLAPTON Posts: 41,865 Forumite
    Combo Breaker First Post
    Subject to your specific mortgage and its T&Cs there is no reason for the remortgage option to be very expensive as long as you 'overpay' the mortgage with the equivalent monthly payments that you were paying on the original debts.
    Indeed, if you get used to doing this and so continue, you will pay off your mortgage much more quickly that otherwise.
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