14% or 5%, BUT HOW?

shnez

i have a loan out with HSBC that i got in august to clear my tax bill and to clear a debt i had, in total i lent £9,000 over 5 years but with the insurance i took it came to £14,487, i pay £241.46 a month and i'm sure the loan is at about 14% APR. In december i recived £10,000 that was money i had been giving to my parents over the years for rent and savings that they were secretly putting away for me untill i was ready to get a house with my girlfriend. As we were on the first time buyers list a house came up for sale and was offerd to us so i used the money as my half of the deposit and my half of the lawers fees. this came to over £9000 and the few hundred i had left bought me this computer. the house is ready in october and we are now paying a draw down morgage of £256,500 at 4.75%. I would just like to know if there is any way i can get my loan on my mortgage rate as it would save my a lot of money i think. Does anyone have any ideas? please advise as i don't seam to have two hapenees to rub together and thik it will probably get worse the closer we get to moving in. thanks.

Ian_W

I would just like to know if there is any way i can get my loan on my mortgage rate as it would save my a lot of money i think.

Hi shenez & welcome,
You won't save money by consolidating the loan into your mortgage. You'll reduce your monthly payments and be paying interest on it at a lower rate but instead of paying for 60 months, you'll be paying for 300 months [25yrs]. By my reckoning you'll end up paying over £17K in INTEREST [assuming you can keep 4.75% for the full term] compared to about £10K at 14% over 5 yrs.

AFAIK the only way you could borrow the extra on your mortgage to pay off the debt is if the LTV of your mortgage doesn't exceed 90 or 95% of the prurchase price of the property, which I suspect is not the case. You could perhaps discuss the possibility with however arranged your mortgage if you're really struggling. Debt consolidation is usually done with remortgages when the equity in the property will allow more borrowing, though not really the best thing if it can be avoided. Another option might be to try to get an unsecured loan with another lender to repay the HSBC one, rates are pretty low ATM, you can check them out on the loans & banking section of the site. It's whether another lender will consider it affordable that might be the problem. Worth checking never the less.

HTH & BoL.

shnez

thank you for your help. i'm just going to see how i get on but will read up on the site as i think martins bit on radio 2 is great.