loan or LOB card

stopthespends

hi all

i have £5000 on credit card - im debating a loan over 4 years or LOB card but thats at 16%

which is the best idea?

i know the best thing is to do 0% for as long as poss and snow ball but i dont really understand and i also dont think that i am dedicated enogugh to do it properly.


whats your advice?

Tixy

16% on a LOB is not a very good rate. Depends on how quickly you can pay it off and whether the amount you will be able to afford to pay will vary from month to month.

If you have a good credit rating then I would imagine you might get a better deal with a loan.

Does the card also have a BT fee you need to factor in to your calcualtions?

stopthespends

hi thanks for the reply

i have appilied to a loan with A&L so will know in 3 days - if not will look at other options!

thanks again

stopthespends

i cant sleep. all i keep thinking of is the mess ive got my self in to.

if i get this loan - again - i will have a debt free date of 2014 or earlier if i make small frequent overpayments to the loans?? . im worried about lasting that long on reduced income. i earn a decent amount and am so sick of paying out loads in debt. i want to be positive and do something about it.

sorry im rambling.

Curt.

Yes you are rambling, slow down. Surely you meant 16% on the loan and not the LOB right? There is no LOB card i know with double digit interest rates...lets hope that you dont get the A&L loan, as that will cost you a fortune at the rate you can repay...if you can get one with APR lower than 10% go with that otherwise go with a LOB transfer, which usually would have no fee either. If you can find a card with a 0% rate on BT's which will approve you go for the ones with the longest periods of times, and in the hope they will approve you too though you gotta hope you get a 5500 limit or so at the very least.

Seeing as you have already applied though, it may well be academic..

stopthespends

what do you make of this???

Your Annual Percentage Rate is 16.9% APR (variable).

Standard interest rates and handling fees are as follows:• Card purchases: We will charge interest at the standard interest rate of 16.9% p.a. variable (a year).
• Balance transfers: We will charge interest at the standard interest rate of 18.9% p.a. variable (a year).
• Cheque transactions: We will charge interest at the standard interest rate of 20.9% p.a. variable (a year).
• Money transfers: We will charge interest at the standard interest rate of 20.9% p.a. variable (a year).
• Cash transactions: We will charge interest at the standard interest rate of 27.9% p.a. variable (a year).
We will charge the following handling fees on transactions:
• Balance transfers: 3.00% (minimum £3.00).
• Cheque transactions: 3.00% (minimum £3.00).
• Money transfers: 4.00% (minimum £3.00).
• Cash transactions: 3.00% (minimum £3.00).

stopthespends

just another thing.

had a letter from capital 1 saying ive got 0% for the next 12months. im thinking of rejecting the loan and LOB and concentrate on the 0% and seeing how much i can pay off inthe next year. is this a smarter move??

chattychappy

Oh yes, go for the 0% deal - assuming it's a BT deal. Transfer as much of your debt to that card as possible. Do not use the card for purchases at all. Then pay according to this priority:

1) meet the minimum payments on the 0% card else you'll lose the deal
2) use the rest of your spare cashflow to pay down any other credit you have
3) Any further spare cashflow either save, or make extra payments against the 0% card.

This is based on limited info for course. Hold off any new credit applications for now. As you get to the end of the year, re-assess things. Maybe at that time apply for a decent LOB card (6.9%+fee is typical), or another 0% card depending on circumstances.