Need Advice Urgently.

rommy

about 5 months ago i borrowed 5k from my bank halifax at a apr of 13.2% which really is not good at all. i was not happy with the rate but needed money at the time so i took out the loan.
i wanted to get rid of the loan as quickly as possible and have about only 2k at the moment which i could use to pay off the loan. so i tried applying to other bank for cheaper rate. A&L have offered me a rate of 11.9% but only if i take out £7500 or more. but i really dont need that amount of money i just need enough amount to move my current loan from halifax to someone with cheaper rate. as i mentioned before i have 2k in my account which i can use to settle with halifax.
should i accept the offer from A&L and use that money to pay my current loan or should i try some other method?. can somebody please give me advice on this matter.?

p.s: just received a letter from halifax. they have given me 5k overdraft on my current account at 13.5%. so i could use this money too. i am really confused now.

golffreak

What i have done in the past is to apply for a credit card that offers at least six months intrest free on balance transfers .Pay 2k off the loan and transfer the rest to the card.Then you can pay the minium amount monthly without any interest.When the six months is nearly up apply for another credit card from a different company.Do this until the money is paid off and you will have paid no interest.(Caution :You need to be disiplined when you have these credit cards in the future not to get into depth i only use them for this reason)

Hope this helps

grumbler

What's the point is using 13.5% overdraft to pay 13.2% loan?

You should start with finding out how flexible your loan is. Can it be repaid early without early redemption charges? Ask them for the settlment figure and post it here along with all other details of the loan. This information can be used to estimate actual APR at the moment that could be much lower than 13.2% after taking charges into account.

Anyway, I don't think it is a good idea to borrow more than you actually need and at 11.9% just to repay the 13.2% loan.

And if your loan allows this, think about using your savings just to repay part of the loan: Pay off debts with your savings! The Golden MoneySaving Rule ...