Your views on my loan restructuring please!

Walrus

In line with my recent post about getting a new car, I've had another look at my finances and have come up with some a plan to get a loan for the car and restructure some other payments I have outstanding.

Currently I have a Natwest graduate loan with £2995 outstanding at 7.6%APR (7.5% interest) and a credit card outstanding of about £800. I currently pay £135 p/m for the Natwest and £100 p/m on the card (this will go up to £200 after my holiday in June).

My plan is to get a Northern Rock loan of £9795, to cover both of the above and my new car. This works out at £296 p/m over three years. The total payback then is £10,657.

Any thoughts or suggestions on this? (My current after outgoings p/m will cover the extra £61 p/m).

Thanks in advance!!!!

zcaprd7

I'd be tempted to get a loan for the car and fold your graduate loan and credit card into a new 0% credit card deal, then move to another deal every 6 months.


If you don't fancy the faffing then have a look at the Texaco 3.9% life of balance deal.

If you are unsure about getting cash from credit cards check out the credit card forum or Martin's articles on super balance transfers (SBTs).

The reason being is that the credit card debt is a bit more flexible allowing you to pay it off quicker if needs be - if you tie up more than is necessary into the loan you pay more interest over the (fixed) period of the loan and there are usually penalties for early re-payment.

Walrus

I thought about the possibility of geeting LoB deals etc, but the problem is the limit on the card being too low, as I ffel that the limit I will be given would not be high enough to transfer. Also the loan allows overpayments and has no penalty fee.

Walrus

bump to the top

mattp_3

Sounds like a plan to me then - but make sure you cut up the cards and make sure you prepare a detailed monthly expenditure and stick to it! Don't even have a card for "emergencies" as that is where the problem starts again.

(Martin has an Excel document somewhere on the site which is brilliant for this)