Loan or not?

dizzyheights1

Hi,

I am after an unbiased opinion.

I have been battling to reduce debt for past 5 years and managed to shrink it from 50k to 14k. However the final 14K is spread over 3 different cards all at O% until next month when the interest will kick in. I am reaching the point where I no longer want to apply for another card and have therefore just applied for a loan for 14k over 3 years at 7.9% (£436 per month) which is affordable. I am tempted to take it and take comfort from the fact that it will be cleared in 3 yrs. Or do I just keep throwing money at the cards?
Any thoughts?

CommitedToChange

Congrats on reducing your debt by so much. As for the loan it depends on the apr of the credit cards, can you repay the loan early? That was you could save extra if you had it and pay off quicker - and if you do take it you MUST!MUST!MUST cut up the cards and cancel the accounts.

dizzyheights1

Cutting up the cards will be the 1st priority and I am hopeful in being able to settle the loan inside the 3 year period. The consequences for over payment is either to reduce the loan term or reduce the remaining monthly payments, although there will be an interest charge if the loan is settled in full early. Thanks for taking the time to respond.

fatbelly

Personally I'd keep rolling with the 0% BT deals, and try for a 0% overdraft too. But I quite enjoy the juggling and I sense you're getting fed up with it.

Your plan adds maybe 3 months to your debt-free date. That's not too bad.