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26K unsecured loan

Hi,
I'm a newbie to this site but need advice - please help!

I have 26k of unsecured loan and 37k of equity but cannot remortgage for 2 years.

The 26k is at 9.89% interest costing me £250.00 per month

Do i try to get credit cards on 0% and spread the amount - if so, where do I calculate what the repayments would be (I can't afford more than £250.00)

Is there a better solution?
Thanks in advance for your suggestions.

Replies

  • TixyTixy Forumite
    31.5K Posts
    Unlikely to be much option for you to do anything.

    You cannot transfer from a card to a loan. There are only a few cards that allow you to balance transfer to your current account (which you could then use to pay off the loan) known as super balance transfer cards. Essentially these are MBNA cards, post office cards and an M&S card. Even if you applied for and were accepted for all 3 cards I would think you will be pretty unlikely to get credit limits high enough to obtain £26k worth of debt. Even if you did the balance transfer fees and the fact that you would then have to move the debt around again when the 0%s finished would likely make the cost not much cheaper than the APR you are paying now.

    You haven't given any other financial information (in terms of your employment/salary etc) but already having at least £26k worth of unsecured debts is likely to make it hard to get much new credit at all.

    Whats the problem with keeping the debt with the existing loan/loan company? If you can afford the £250 then presumably you can keep up your repayments.

    Personally I would move the debt from unsecured to secured even in 2years time when you can remortgage - if you lose your income/have a change in financial circumstances then you are at a much greater risk of losing your house.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • YorkshireBoyYorkshireBoy Forumite
    31.5K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    (I can't afford more than £250.00)
    No point going any further then because 1% (which is the lowest minimum payment on cards these days) of £26K is £260 per month!
  • Hi again,

    thanks for your comments

    to clarify, I am looking to reduce a 26k unsecured loan at 9.89% for 2 years before I am able to release (hopefully!) equity to pay some/all of the loan off.

    I am struggling to repay £250 per month on top of all other commitments so am wondering if I can reduce the monthly repayment by transferring the loan on to credit cards at 0%. I appreciate the credit cards 0% period will expire before I am able to remortgage so am aware that the balance tranfer sums need to be added in to the overall monthly repayment figure.

    I understand that converting the loan from unsecured to secured is a risk but surely this will get the monthly figure more managable as a trade off?
  • TixyTixy Forumite
    31.5K Posts
    No as yorkshire boy says all credit cards require a 1% minimum fee each month. So if you owe £26k (plus balance transfer fees) then your minimum monthly payments will be 1% so £260 a month to start. So it will be a higher monthly payment than you have now.

    And as said - your chances of getting sufficent limits on super transfer cards to do the transfer is very low.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • pwukpwuk Forumite
    152 Posts
    Part of the Furniture Combo Breaker
    Forumite
    Tixy wrote: »
    There are only a few cards that allow you to balance transfer to your current account (which you could then use to pay off the loan) known as super balance transfer cards. Essentially these are MBNA cards, post office cards and an M&S card.

    Lloyds TSB AmEx Duo Card works for super balance transfers too. I suspect the same is true of all their credit cards.
  • YorkshireBoyYorkshireBoy Forumite
    31.5K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    pwuk wrote: »
    Lloyds TSB AmEx Duo Card works for super balance transfers too. I suspect the same is true of all their credit cards.
    That's the first I've heard of that. Could you give further detail?
  • pwukpwuk Forumite
    152 Posts
    Part of the Furniture Combo Breaker
    Forumite
    That's the first I've heard of that. Could you give further detail?

    I received a letter earlier this week with an offer stating "Give your current account a boost"

    0% for six months with a 3% fee applying - available until the end of June.
  • YorkshireBoyYorkshireBoy Forumite
    31.5K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    pwuk wrote: »
    I received a letter earlier this week with an offer stating "Give your current account a boost"

    0% for six months with a 3% fee applying - available until the end of June.
    Ah OK, that's an existing customer offer. I've had several of those from Yorkshire Bank as well, although none for a year or two.
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