Is another loan the right answer?

scotvik

I currently have a loan with TSB which is due to finish August 2008. I have also managed to run up debts amounting £12,500 on 2 credit cards, one is TSB - £10,000 and the other is Virgin - £2,500. I currently pay £177 for my loan a month and pay £200 and £50 on each credit card.

Would it be best to get a loan to pay all this off so I only have one monthly payment to make? Was thinking of contacting my bank to see if I can top up the loan but would it be worth it?

Rafter

All depends on the interest rates.

The main problem is that you seem to be living off borrowed money and beyond your means.

The repayments you are making on your cards will take you about 7 years to clear your balance and presumably you built these up in a lot less than 7 years so your budget is not balanced.

If the APR on a loan is less than the APR on your credit card you will be better off in terms of interest. Your monthly payment may be about the same or even more depending on the term of the loan though.

Just make sure you rip up the credit cards if you do get a loan and control your spending - otherwise you will get even deeper into debt.

R.

scotvik

I want to rip up the cards as I never want to rely on credit cards ever again. To cut a long story short I was living with my partner for 3 years and he was in temp work all the time but was out of work for long periods. That's where the credit cards came in as I was using them to pay for bills etc. It all got too much and I decided to leave him and move back to my parents house to concentrate on getting my debt clear. I now don't have any rent, council tax, etc to pay so now my outgoings are a little less than my incomings whereas before they were way over.

I find credit cards far too tempting and would rather not have them at all so I don't get into any more trouble.

margaretclare

Just be clear in your own mind that replacing credit card debt with a loan is not 'paying off' the debt, you simply move it to another place, it still exists.

Credit cards in themselves are not evil - they can be useful, but like everything else, need careful responsible handling. Using them to pay bills is not a good idea. We have a special account from which all bills go out by monthly direct debits and we each have a credit card which we pay off monthly.

Margaret

Xbigman

You would be better off transferring your credit card debt onto 0% credit cards. You can then overpay like mad to clear the debt as quickly as possible interest free.
Getting more cards does depend on your credit record. Have you missed any payments? If not then make sure you are on the electoral roll at your current address and then you can try a few.
If you want to do this then repost on the credit card forum. They know more about what 0% offers are currently around than the regular loan posters.
Also check out the debt free wannabe forum for 'snowballing' debts.
Regards


X

roswell

I would suggest you take a little walk to the debt free wannabee board and look at your spending habbits.