Loan to pay off Credit Card?

BIGEYE

I have a very large amount owing on my CC and am paying around £258 month (minimum amount). Even If I pay more than minimum amount, the bablance is dropping very slowly. It looks like it will take many years at this rate to pay off.
I was considering taking out a loan to pay off this card and repay the loan over five years. That way, the loan monthly repayments would be less than what I pay on the card, and there would be an end in sight. Is this the correct thing to do? Also, if I go down this road, should I take out loan protection?

TIA

dano17439

I would apply for another credit card then transfer your balance for a 0% rate. At least your £258pm would go to reducing your debt instead of on interest

Any

Firstly how much is there actually on the card and what is the APR?
What is your credit history like? Any missed paymemts in the last 12/6 mths or ever, do you earn good wage, what is the existing debt % in comparison to your current debt?

It might be an option to take a loan with lover APR % to pay off the card and have end in sight. Only if the loan % is lower then the card % though...
And not all people will get loan advertised %APR... depends on their credit history.

Your credit file might be even so good as to be able to obtain 0% balance transfer card...

Basically, we are not magicians and don't pull answers out of the hat. We need more info!!

BIGEYE

Amount owing on card around £9100, dont know what the APR amount is. The card doesn't exist anymore, it is one of thos Beneficial Finance cards that closed up shop some time ago.
The debt on the card is about 55% of my total debt. I earn a reasonable wage, taking home around £2400 per month. The wife earns around £1100 per month, so could apply for a joint loan.

Saucepot

BIGEYE wrote: »

I have a very large amount owing on my CC and am paying around £258 month (minimum amount). Even If I pay more than minimum amount, the bablance is dropping very slowly. It looks like it will take many years at this rate to pay off.
I was considering taking out a loan to pay off this card and repay the loan over five years. That way, the loan monthly repayments would be less than what I pay on the card, and there would be an end in sight. Is this the correct thing to do? Also, if I go down this road, should I take out loan protection?

TIA

Think of your plan to reduce your debt and see the £258 you are paying as a combination of interest & reducing the balance. The smaller portion of the £258 that is interest, the more goes towards reducing the debt.

Balance transfer cards can offer 0%, with the fee usually 2 or 3%. This would be cheaper than a loan for the year, but you need to be disciplined in 2 ways. One to not use the card for purchases & second to move the remaining debt from the card when the 0% expires to whatever is the cheapest option in a years time. Either another 0% card or a loan.

A loan will offer you a fixed rate & term and require none of this, only that you make the monthly payments. At an interest rate of around 7% it would be more expensive.

If you can be organised and disciplined go for the lowest cost option.

BIGEYE

Who is going to take on such a large debt at 0%, considering that the credit card ceased to function some time ago?

MFWannabe

I don't think it will matter that the card ceased some time ago. You could try MBNA/ Virgin credit card; they usually give bigger limits than some of the others

BIGEYE

I will apply once my latest statement comes in post and let you know how I get on.

fozmcfc

Even if you get half the amount you want at 0%, it means you can just pay the minimum without getting any interest and put all the extra payment towards your current card. Then at the end of the 0% deal try for another card.

BIGEYE

I am in the process of filling in my application for cc to MBNA with a view to transfer the high outstanding balance as advised above at 0% APR for 16 months. I have got to the last page and it is offering me a rate of 24.9% (same as I am on just now), no mention of the 0% APR. What do I do?

pinkarsenalprincess

Is the 24.9% for after the offer period?
I have the MBNA o% BT card and I was also quoted the 24.9% APR, however this was once my offer period has finished.