Is there a downside to this - merging a loan?

sidneysides

I have 3 loans with the AA

Home Improvement £12145 left - finishes Aug 2010 paying £293 a month
Car Loan - £8246 left - finishes April 2010 paying £214 a month
Car Loan - £3404 left - finishes Jan 2008 paying £232 a month

As I stated on another board, I am trying to clear my debts which also include Credit Cards. My further advance application has been pegged at 90% LTV (long story)

In essence, I'm trying to cut my monthly payments.

If I combine these loans together into one loan to finish in August 2010, my payments will reduce from £737 to £610.
Is it worth it? Would it be better to struggle ans finish the January 2007 loan?

Any advice appreciated.

jonesMUFCforever

Unless we know the interest rates charged on the loans it is impossible to say what we think is best for you.
I would (if you have not done so already) go to the Debt Free Wannabee board as it seems from your posts to achieve lower monthly payments you need also to cut down your outgoings.

Mikeyorks

Not an expert on loans - so will offer no comment. But my Maths are reasonable and there's something wrong with your Jan 2007 figures ( £3404 o/s @ £232pm cannot = Jan 2007?) - Jan 2008??

Was simply going to say - yes, of course complete and don't consolidate that one as there's only 2 months to go. Then realised it's closer to 15 payments -so it's probably the date rather than the balance / monthly pyt that's wrong?

roswell

WHy not have a walk over to the Debt free Wanna be section they coudl give you some very usefull advice on custting down your spednign rather than consolidating. Im Guessing but correct me if im wrong that this wont be the first time you have consulidated

Xbigman

Its not a merging of loans, its consolidation and it rarely works to reduce debt.

Also, 2 car loans running at the same time is just a big signal that you have financial problems. Please visit the DFW board and have a good read.
Regards



X

sidneysides

Xbigman wrote:

Also, 2 car loans running at the same time is just a big signal that you have financial problems. Please visit the DFW board and have a good read.
Regards



X

One is my wife's car and the other is my car - not 2 car loans for one car

roswell

No offense but really its the same thing, Assuming you got both cars at the same time when they need replacing you will need 2 more loans at the same time ... and the cycle will continue.

If you look at your spending you can stop the debt spiral.

Debt_Free_Chick

sidneysides wrote:

I have 3 loans with the AA

Home Improvement £12145 left - finishes Aug 2010 paying £293 a month
Total to pay £12,892
Car Loan - £8246 left - finishes April 2010 paying £214 a month
Total to pay £8560
Car Loan - £3404 left - finishes Jan 2008 paying £232 a month
Total to pay £3016


Total for existing loans £24,468

If I combine these loans together into one loan to finish in August 2010, my payments will reduce from £737 to £610.

Total to pay for new loan £26,840

So as you can see ... you reduce your monthly payments, but you simply end up paying more out. In my view, it's not worth it.

regularsaver1

Can you sell cars as I mentioned in your further advance post?

or get one big family car as you said your having a baby in new year

http://forums.moneysavingexpert.com/showthread.html?t=301661

sidneysides

We both drive to work unfortunately. I am going to let the loan run its course and, depending the outcome of my letter to Scottish Widows (I've asked if they will do 92.5% LTV) We could be free of that loan in Jan 07 and the others in 3-3.5 years time. Pay of ALL credit cards now, have funds to cover maternity leave and have a manageable bufget. I'm really commited now to getting rid of the credit - no more consolidation (as long as I get this 92.5%)