loan advice

bratz81

Hello all,

I'm after some advice, regarding getting a loan to pay off a credit card.
I have a credit card I'm paying off monthly, I'm paying over the minimum payment every month, by around £30 a month at the moment but this will increase as the min payment goes down. I pay £130 a month right now. The interest rate is 18% and I owe just over 4k :eek:

I was looking at Zopa and I can get a loan for £4400 ( which will cover this) and the interest rate is 8.8%. The monthly repayment, over 36months, is £138.42. Apparently you can overpay this if you want to and pay off the loan earlier.

Now...looking at it things seem obvious, go with the one with lower interest. But, I don't think I have a great credit rating so not guaranteed to get this Zopa loan ( have only got a quote so far) and I'm also wondering if there's anything I haven't thought of that could make this a bad idea.

any advice??

paddyrg

Great idea - if you can get the rate and an offer.

But first things first, cut up that card!!

bratz81

oh the card is already cut up don't worry!!
I really want rid of it, and I rejected the last apr increase so the account is basically closed I think and I just pay it off monthly.

alixandrea

I would look into a contingency plan just in case the Zopa loan doesn't come through for you. Look at local credit unions and get some quotes from your high street (banks/supermarkets/post office) too.

You could look into doing what a relative of mine very kindly agreed to do with me. They paid off my credit card debt with some of their savings and then we entered into a documented agreement, whereby I repaid them a monthly sum with an APR much greater than they would have got on their savings (let's face it, saving rates are awful right now!) but much lower than I would have been paying if the money had stayed on my credit card. We both got the best out of that deal. :-)

Alixandrea

bratz81

Alixandrea that's a pretty good idea
tbh I hadn't been planning on getting a loan to cover the card as I didn't think I had a good enough credit rating. I have a bit of debt, that cc and another loan I got out for my mother which she's not paying back (long story!).
It was only when someone mentioned Zopa that I looked online so if it doesn't come through it wouldn't worry me too much - I will just try to improve my credit rating til I can switch to something with lower interest.

Apples2

bratz81 wrote: »

and another loan I got out for my mother which she's not paying back (long story!).
.

And there, in a nutshell, is why lending to, or borrowing from, friends or family should be avoided.

alixandrea

Apples2 wrote: »

And there, in a nutshell, is why lending to, or borrowing from, friends or family should be avoided.

Apples, you seem to have this habit of assuming that everyone is out there to rip off and scam everyone else; even their closest family members. What you don't think about is whether there might actually be a genuine, positive reason behind people's actions. For instance in this case the OP's mother may have loaned the OP some money in the past, and now the OP is returning the favour. Or the OP's mother might be repaying her child in some other way; perhaps in the future with a larger percentage of an inheritance or whatever.

Every reply of yours I've read on these forums so far has immediately assumed the very worst of everyone involved. Perhaps you might think about being a little less judgemental of people, and at least a little less aggressive in your language, before hitting 'submit reply'?

Alixandrea

Apples2

I respect your opinion but THIS THREAD has 549 replies and over 211,000 views for people to make their own mind up.
Hope yours works out for you.

Tixy

alixandrea wrote: »

Apples, you seem to have this habit of assuming that everyone is out there to rip off and scam everyone else; even their closest family members.

Its not just about people trying to rip off their family members and friends.
Its also about what can go wrong due to a change in the financial circumstances of one of the people involved and about how difficult it can be if you end up inadvertantly seriously affecting the credit file of a relative or how horrid it can be if people fall out over money etc and how even by having an agreement in place in no way means you'll be certain of getting the loan repaid.

paddyrg

'Fraid to say, I'm with Apples on this one. Of course circumstances will vary wildly, so it is a blanket rule without knowing the details of the situation, but loans to/from family and friends go wrong disproportionately frequently compared with bank/institution loans which are more formalised. I don't know why, and of course there are no official rates published, but the incidents we see here time and time again suggest avoiding it is a good idea. If nothing else it can strain relationships with the very people whose shoulders you would want to cry on seeking support if it goes pear shaped.

Zopa do lend to less than prime markets, also try yes-secure for way sub-prime peer lending too.

jammin_2

johnright13 wrote: »

If you have no money and you have a big function or you want to buy a car or house, it is a best way to take a loan from a bank.Nowadays Many of banks give loans easily. They give loan on your house papers or salary slip or bank statement.Banks offer low interest on loans. Banks provide loans to many customers. We can pay loan by easy installments. Because of low interest it is best way to get money by loan. We can also take a loan on house. Sometimes government also gives loan on low interest.

:rotfl:...