Credit Card to Loan?

Smoggie69

I am looking at getting a loan to cover my credit cards. I have no problem making the minimum payments each month, but I would like to have a definite end date at a possibly cheaper rate. I am looking the M&S loan over 6 years at 6.9%.

I currently have:

Halifax - £8,863 - Min. Payment £88 - 6.95% for life of the balance
Barclaycard - £2,548 - Min Payment £57 - 7.8%
Virgin - £7,795 - Father-in-law’s which should hopefully be coming off this month.
Tesco Personal Loan - Approx. £3,000 left. Loan ends December 2012. - 6.9%

Would I be likely to get a loan to cover the Halifax, Barclaycard & Tesco credit?

I currently earn c. £32,000.

BTW, before anyone mentions it, I'm aware that I have someone else's debt on my card, however this is going to be re-transferred ASAP.

Tixy

Very unlikely. You already have debt in your name of £22k on a salary of £32k. If you apply for a loan of £14k this will be treated by the potential lender as additional borrowing (as they cannot be sure you will pay off your cards, or not run the debts back up again). So you'd be looking at an exposure of £36k, in excess of your salary. As a guideline in the current climate its hard to get new borrowing that takes you to much over 50% of your income.

talana

I currently earn c. £32,000.

But you currently have ~£22,000 debt and would be applying for an extra ~£14,000. On that salary you'll fail the affordability test for any more credit I'm afraid.

I am looking the M&S loan over 6 years at 6.9%.

Even if they were to offer you a loan, 6.9% isn't guaranteed. Indeed a higher rate seems likely.
Unless I'm missing something most of your debt is around 6.9% now anyway. Just concentrate on paying off the Barclaycard asap, min payments on the rest.

Consumerist

I agree with both prior posts. You are unlikely to be able to better the rates you are currently paying, in the unlikely event you are granted further borrowing.

geoffky

how will you pay your debt back...at the moment you are servicing it and not paying it back...it will get out of control in the end..

Consumerist

Smoggie69 wrote: »

. . . I have no problem making the minimum payments each month, but I would like to have a definite end date . . .

OK. So you would like to pay off your cards in 6 years.

Let's assume your father-in-law pays off your Virgin card so you are left with a total card debt of about £11.5k to pay off over 6 years at 7.8% APR max (your figures).

If you put that into the MSE Loan Calculator that means a repayment of £200 per month. Concentrate on paying off the card with the highest (7.8%) APR first until repaid in full. Make only minimum payments on the others until they become the highest oustanding APR.

It may not look as tidy as having a loan but it is far more flexible. You can pay off more in good months and less in bad months - you will not be able to do that with a fixed-payment loan and there will also be early repayment charges if you want to settle a loan early.

Accordingly, in answer to your original question, stick with the cards and have the discipline to stick with your repayment plan.