Loan advice with bad credit history

Spinxy

i have applied for a loan, to consolidate existing credit card debts,
i when through ocean finance and it's a secured loan,

it's for £11000 over 10 years (they said at 15.6% APR) but from the £180 per month pay back this don't sound right!!
even though it sounds like a dodgy deal i am still thinking of going with it, as i would like to be rid of my credit cards which i'm not very good at managing at all!!!

i've struggled a bit over xmas as i haven't been paid when i useally would and as i'm a contractor i don't get holiday pay!! here's some of my situation.

credit cards,
Morgan stanley £5400 (limit £5200) (this is in a state they won't set up DD, i have become very anoyed with them and am now ignoring them, as well as i don't have any money to pay them with untill 2 weeks time)
Citi card £1800 (limit £2000) on min payment 70
Virgin £5100 (limit £5000) now on DD on min payment 105
Barclay card £3200 (limit 3500) on DD on min payment 80

i am planning on using my loan to pay
morgan stanley £5000 leaving 400
Citi £500 leaving 1300
Virgin £3000 leaving 2000
Barclaycard £1500 leaving 1700

leaving 1000 which i have left to pay needed bills and council tax etc to get me upto date.

1st is this loan way out for a bad credit person?!? are there any others that might do a lot better

2nd would you distribute the money differently, i thought i would clear more off the one i find hard to manage and worst for charges, and also bring the rest as far away from there limits as possible!!!

jacquij123

Hi,
I'm going to jump in first and say "Don't do it!". You will be paying a whopping £21600 back and dragging it out over ten years and putting your home at risk.

Head over to http://forums.moneysavingexpert.com/forumdisplay.html?f=76

Before you go prepare a list of all your outgoings and incomings as well as the interest rates on all the debts. There are loads of experts over there to give you advice and help you.
Good Luck.

jamesd

181.53 is right for that loan. Any chance of your mortgage lender offering you an additional advance? Or possibly taking a repayment holiday or switching to interest only for a while?

When paying off debt you should generally pay the one charging the highest interest (and charges) first, then move on to the next lowest. The others should be paid on time, every time, at only the minimum, so the regular on time repayments help your credit rating to improve.

Do always pay the council tax and utility bills as well as the mortgage payment.

Spinxy

jacquij123 wrote:

Hi,
I'm going to jump in first and say "Don't do it!". You will be paying a whopping £21600 back and dragging it out over ten years and putting your home at risk.

Head over to http://forums.moneysavingexpert.com/forumdisplay.html?f=76

Before you go prepare a list of all your outgoings and incomings as well as the interest rates on all the debts. There are loads of experts over there to give you advice and help you.
Good Luck.

Hi,
i have looked through there and can't find much, is it to do with one of the soa things, i can't find how to do one of those either!!!

the loan is more of a short term quick fix, i am quiet a high earner and to be honest most of my money is wasted on CC's over there limt's and only sticking to min payments/forgetting to pay and me going out having fun!!! Hence the loan, i would have been planning on settling the loan early once i had settled and into the routine of paying all bills on time also from claiming back unfair charges i estimate at least 5k maybe even 10k that i should get back, my history is that i have struggled the last 3 years approx, in the last year thou i went contracting my debt must have been approx 50k, now i would be able to cover all my current loans/CC's with less than 30k aswell as also having my mortgage on a 20 year repayment!! and also just investing in a apartment abroad!! i just really need to get rid of these credit cards quickly esp morgan stanley, then virgin, then barclay card. for the past year i must have been paying £105 pcm to virgin to only pay off £10 and the morgan stanley card is worse due to forgetting to pay it all the time!!
i'm not very good at saving as i still belive i'm young and should have a good time as well as get rid of debt or invest. however i am okay when it comes to making commitments i.e. loans!! mortgages etc
last night i did think of a better way of distributing the money!!
by paying
5200 to virgin clearing it
3200 to barclay card clearing it
500 to morgan stanley leaving 4900
1100 to citi leaving 700

then doing a 0% transfer of the remaining 4900 morgan stanley back onto my virgin card!!! for me to then snowball citi card, then virgin!!!

Spinxy

jamesd wrote:

181.53 is right for that loan. Any chance of your mortgage lender offering you an additional advance? Or possibly taking a repayment holiday or switching to interest only for a while?

When paying off debt you should generally pay the one charging the highest interest (and charges) first, then move on to the next lowest. The others should be paid on time, every time, at only the minimum, so the regular on time repayments help your credit rating to improve.

Do always pay the council tax and utility bills as well as the mortgage payment.

i would ask my lender (halifax) but about a year ago my propery ground rent people went to them for £800 to which i still have and agreement with then also to cover i think one months missed mortgage, because of this i think they will say no straight away,

i generally find it very hard to leave myself with no money to have fun with, to put it all onto a credit card!! example putting 500 onto one and paying min on others will take at least 2.5 years to pay off, althou i understand what your saying i can only do this when i can see good changes straight away!!

immoral_angeluk

Spinxy wrote:

Hi,
i have looked through there and can't find much, is it to do with one of the soa things, i can't find how to do one of those either!!!

the loan is more of a short term quick fix, i am quiet a high earner and to be honest most of my money is wasted on CC's over there limt's and only sticking to min payments/forgetting to pay and me going out having fun!!! Hence the loan, i would have been planning on settling the loan early once i had settled and into the routine of paying all bills on time also from claiming back unfair charges i estimate at least 5k maybe even 10k that i should get back, my history is that i have struggled the last 3 years approx, in the last year thou i went contracting my debt must have been approx 50k, now i would be able to cover all my current loans/CC's with less than 30k aswell as also having my mortgage on a 20 year repayment!! and also just investing in a apartment abroad!! i just really need to get rid of these credit cards quickly esp morgan stanley, then virgin, then barclay card. for the past year i must have been paying £105 pcm to virgin to only pay off £10 and the morgan stanley card is worse due to forgetting to pay it all the time!!
i'm not very good at saving as i still belive i'm young and should have a good time as well as get rid of debt or invest. however i am okay when it comes to making commitments i.e. loans!! mortgages etc
last night i did think of a better way of distributing the money!!
by paying
5200 to virgin clearing it
3200 to barclay card clearing it
500 to morgan stanley leaving 4900
1100 to citi leaving 700

then doing a 0% transfer of the remaining 4900 morgan stanley back onto my virgin card!!! for me to then snowball citi card, then virgin!!!

Don't get me wrong but I would not class £180 a month for 10 years as short term! :eek: You're paying back nearly double for a 'quick fix' and I think sooner or later you're going to be left with a massive headache from it.. especially as it's not completely clearing your other debts.. just adding another £10600 on top of what you already owe.

jamesd

If you can pay it back in 2.5 years without the loan, that sounds like the best idea. If you have any savings or investments it is probably a good idea to use them to help. Family may also be of assistance, perhaps if you offer 10% interest tax free, a very good deal compared to a bank but also a good deal for you.

Spinxy

immoral_angeluk wrote:

Don't get me wrong but I would not class £180 a month for 10 years as short term! :eek: You're paying back nearly double for a 'quick fix' and I think sooner or later you're going to be left with a massive headache from it.. especially as it's not completely clearing your other debts.. just adding another £10600 on top of what you already owe.

short term quick fix was aimed at getting rid of CC's, if i compare the loan to the cards the way they are going at present the cards will probably take 30 years to clear (more to the point i'm sure morgan stanley are very soon going to pass my debt to a debt collector)!!! my idea with the loan is that i can instantly get rid of any trouble from at least 2 credit cards and be shot of them and half all others whist also bring me upto date with bills that have fallen behind, to bring me in the clear and put all bills back onto direct debit to get me on good track for 2007, once in this position hopefully by feb (without headache and being very stressed like i have been), i can then take a detailed look at all remaining debts and see where i can reduce them with a clear head knowing i'm not in trouble!!! early repayment penalty for the loan is only 1 months interest, and am able to pay lump sums off!! realisticly i will only be looking at having the loan for 5 years max!!

Spinxy

jamesd wrote:

If you can pay it back in 2.5 years without the loan, that sounds like the best idea. If you have any savings or investments it is probably a good idea to use them to help. Family may also be of assistance, perhaps if you offer 10% interest tax free, a very good deal compared to a bank but also a good deal for you.

cheers talking about my mortgage lender made me call them to find out where i was, to find out all arrears have been clearer and as of 23rd jan i'm back on my normall payment, which also means after that i should be able to increase my mortgage or get some sort of loan with halifax, which will be much much lower interest than the current loan i'm being quoted!!

i have a fine line between repaying debt and enjoying myself while young!!
i also find that when paying to much into debt i end up feeling like i have no money and i'm skint which makes me depressed and end up spending even more to cheer myself up, so i'm trying my best to find the right balance!!
i've relied on family in the past to many times, this time i want to sort myself out, it will also teach me the hard way!!!