Need some advice.

tomw123abc

Hi, I'm Tom and need a little advice. Let me break it down for you.

I'm with the Halifax and am £1,300 into my overdraft and paying £30 a month for it.
I pay £103 a month on my car finance with £2,843 over 24 months left to pay. It's £2,592 if a settle it early.
I pay £68 a month for my car insurance, but would be roughly another £600 if I settle early in the next two weeks.
I also need £500 for a deposit on a course I need to do.

I was accepted for a loan of £7,000 at 12.3% paying back £8,884 over 4 years at £185 a month. There wasn't a point in getting a £5,000 loan as it was just over 20%........I haven't completed it yet.

A little advice would be massively appreciated. Ta Tom

hostie

You could switch to a different bank with a free overdraft. If you can't get one now you will easily get one when you are a student. I don't think you need the loan to pay off your debts. I can't see it helping you in the long run.

NeverAgain_2

It's not clear what you are going to use the £7,000 for.

Presumably, you are thinking of clearing your car loan and overdraft.

But you are not 'clearing' it, merely putting it somewhere else.

Most people find debt consolidation doesn't work.

In this case you are changing a two-year car loan into a four-year personal one, which almost certainly means paying more interest.

bottleofred

Hi Tom,

NeverAgain is correct as debt consolidation only works for around 10% of people who try it and I wasn't one of them. I'd advise against changing the car loan to 4 years as the interest will be more and the car worth much less when the last payment is made.