Refinance to pay off loan without PPI?

river

Hi everyone, my first posting so please be gentle ;-)

I've been contemplating paying off my bank loan by carrying out the CUT PRICE PLASTIC PERSONAL LOAN scheme of transferring my loan over to M&S More card to get the interest rate down to 3.9% rather than the larger rate from my bank. The only issue is that I don't have a credit card at all and I've kept it that way on purpose but it seems to be more harmful than beneficial, especially considering credit scoring etc. Now, if I follow this idea of Martin's, it means I'm going to have to apply for two cards at once, first either the M&S and then an EGG Money card. And I don't know if I'd be eligible for them or not.

The problem is also that I have a PPI on my loan which I'm trying to get rid of but talking to my bank (Lloyds TSB) they won't allow that. Instead, the lady who was helping me over the phone advised me to perhaps refinance my loan to get a new one without PPI and pay off the one I currently have with PPI and get rid of the PPI that way... This sounds costly or a bit fishy to me. Any advice? Grateful for any help, thank you kindly beforehand.

/River

river

I've since read the postings on how to get rid of your PPI and will take action about that. But the question of the credit cards and the maximum credit I'd be allowed still stands. Is there any way of finding out what the maximum credit a card company would allow you to have BEFORE actually applying for it? So that if I don't get the credit I need, I don't get stuck with the card.

mrcow

I don't think thre is really as it's up to the lenders discretion as to how much they are prepared to lend. You can always call M&S and ask the question.

With most of the credit cards we've had (MBNA, Virgin, Halifax, First Direct) the limit has always been about 25% to 35% of annual income or thereabouts.

You can always apply and then ask for a limit increase once the account is open if it's not enough? But certainly ask the lender before you apply on the phone as they may have set guidelines.

Welcome to MSE btw!

river

Thanks a lot for the reply and the welcome. You've helped to remind me about another factor I forgot to consider as well, much obliged!