Advice re paying off credit card with loan please

Sally7984

Hi There

This is my first post here but I have visited for some time now. I was hoping someone could offer some good advice as I just can't decide what the best option is. It is probably glaringly obvious but I just can't see it!

I am in the process of purchasing a new car. It is £7500 and a private sale. I have been offered a loan with M&S for £10000 (this was what I though I was going to need) which had an APR of 11.5% over 7 years which was £170.88 per month. The same loan for £7500 would be £128.16 per month.

I currently have two credit cards, one with Barclaycard, which has a balance of £800 but is 0% and one with Virgin which has £1800 with an APR of 7.7% (this is what my husband uses for his business). What I am wondering is should I take the full £10000 and pay these cards off?

I also have a loan with Tesco which owes £10000 but was turned down several months ago for an £8000 increase to the loan owing to affordability criteria but do you think it is worth ringing them again to see if there was anything they could do since I have been accepted with M&S? Presumably increasing this loan would work out cheaper each month? Any advice would be greatly appreciated. It might be best just to take the £7500 and keep paying the credit cards but I can't decide.

dano17439

If you are comfortable having nearly 20k of unsecured debt, then go for it. Personally i would only borrow whats needed and keep the cards at 0%.

Or buy a cheaper car and use the extra money you would of spend to pay off your existing Tesco loan quicker?

Sally7984

Thanks Dano - wouldn't say I was comfortable but needs must! The existing tesco loan relates to a previous vehicle which i had to sell in order to get my house deposit together includes some consolidation as well.

easy

Cass7984 wrote: »

Hi There

This is my first post here but I have visited for some time now. I was hoping someone could offer some good advice as I just can't decide what the best option is. It is probably glaringly obvious but I just can't see it!

I am in the process of purchasing a new car. It is £7500 and a private sale. I have been offered a loan with M&S for £10000 (this was what I though I was going to need) which had an APR of 11.5% over 7 years which was £170.88 per month. The same loan for £7500 would be £128.16 per month.

I currently have two credit cards, one with Barclaycard, which has a balance of £800 but is 0% and one with Virgin which has £1800 with an APR of 7.7% (this is what my husband uses for his business). What I am wondering is should I take the full £10000 and pay these cards off?

I also have a loan with Tesco which owes £10000 but was turned down several months ago for an £8000 increase to the loan owing to affordability criteria but do you think it is worth ringing them again to see if there was anything they could do since I have been accepted with M&S? Presumably increasing this loan would work out cheaper each month? Any advice would be greatly appreciated. It might be best just to take the £7500 and keep paying the credit cards but I can't decide.

It doesn't make sense to pay off a 0% and a 7.7% balance with a loan costing 11.5% UNLESS you know that you are going to take a very long time to pay these off otherwise. And if that is the case, you probably can't afford the loan !!

Get your husband to pay off the 7.7% card. If this is from his business expenditure, it should be his businesses responsibility to meet the payments.

You should do the best you can to pay off the 0% card before the 0% period expires. Why pay any interest if you don't have to?

And borrow just enough on the loan for your Car, Which will hopefully allow you to make bigger payments on the outstanding Tesco account, and save money all round ??

Sally7984

Thanks Easy - I think I knew that was the answer but just needed to hear it from someone else. Yes, totally agree about the 7.7% card. It is just a slight build up from a hard year last year. With a bit of luck I should be able to get the barclaycard down quick by making overpayments.