Loan help

bgarnish

Im not the most savy person when it comes to loans and credit cards, and tend to overwhelm myself with lots of avenues and consequently getting very confused.
I was hoping if i explain my situation here that someone could help me.

I currently have a £5,000 loan over 5 years with an APR of 8% with Lloyds TSB.
Im paying back £126.33 (ish) a month at the moment.

But i have to take out a further £2,000 to clear overdrafts and get me back into the clear and sticking to just one figure a month.

Im looking to keep the monthly repayments to no more than £140, if i can, under £140

Can someone advise me on the cheapest and best way to go about this.

Any information is hugely welcome.

Thanks in advance.

B

katehesk

5k over 5 years - thats a lot of interest on a relatively small amount.

I don't know what the cheapest options for you are, but could you not afford a higher repayment monthly, paying a loan over a lesser period.

Your monthly repayments may be lower over a longer period, but if you can budget to pay it over a lesser term you will save massively on interest.

CLAPTON

a 5,000 loan over 5 years years at 8% should be costing you about 100 per month and not 126 per month
have you got PPI on the loan?
if so you may consider taking out ASU separately and cancelling the PPI as its usually much much cheaper

8% APR is a reasonable rate so apart from the PPI issue I wouldn't change that

what APR are you paying on the OD?
why do you want to get a loan to shift the OD somewhere else?

bgarnish

Im looking to clear the overdrafts on my current account and my old graduate account which has been switched to a current account with out me knowing. Before the graduate account had a 0% interest rate on the overdraft, but now has gone up to the usual APR, im not 100% sure what the APR is tho.

The current loan does have PPI which i wasn't aware of so im taking steps to clear this and claim some money back, even tho it's only been a year im sure i can claim something back.

@CLAPTON

Are you suggesting that i don't get another loan, but instead just pay the overdraft off each month, like i would a loan?

CLAPTON

If you can get rid of the PPI whilst still retaining the loan at 8% APR then presumably you will have a 'spare' 40 per month .. is that the maximum you can afford to repay each month?

without knowing what APR you are paying on the ODs it's pretty impossible to say whether getting a loan is good or bad.
Are you using both a/cs... as often banks don't like inactive a/cs just with ODs and are liable to recall them

Interest rates on loans have generally risen due to the credit crunch and loans for small (2k) amount are relatively expensive

bgarnish

@Clapton

Im using both account. I transfer money from one to another depending on how low i get on each one. Currently im finding it difficult to clear out of the over draft on one of the accounts which has £1,500 and the other £500, hence the £2,000 loan i was looking at getting. But you are correct, in that the £2,000 loan has APR's of 14.9% which in my mind is way too high.
I think that the overdraft is smaller than that, so therefore should just pay it back as if i would a normal loan. I will double check on the APR of the overdrafts and get back to you to see where i sit then.

Thanks alot for your feedback.

Happy Friday!!

B

CLAPTON

you've obviously got the bank a/cs working to your advantage

you may also want to consider applying for a 0% BT card... obviously this depends upon how much you can pay off the card before the promotion deal runs out so it depends upon how much you can repay each month.

bgarnish

@Clapton
What would you suggest.....
I've taken a look at Lloyds tsb website and I think im being charged 1.3% per month on the overdrafts and 16.5% EAR.

What would you recommend paying back as a monthly fee?

Im completely open to all suggestions.

Thanks once again.

B

CLAPTON

how much can you afford to repay per month

you have one OD of 1,500 at ??? apr?
and one at 500 at ??? apr?

do you currently have a CC?