40K loan required best option?

Simon22

I'm considering taking out a £40,000 loan.

My credit rating, if that's worth anything in the real world is classed by Experian and Equifax as "Excellent".

I have NO CCJ's , a decade of perfect payments on all credit, some 0 balance credit cards and no missed payments or anything odd.

I always have more coming in, than going out in my personal account the loan would be attached to.

I do own my home (mortgage).

I'm self employed and employed at the same time.

I want to pay off a few cards and some other bits and pieces and have one payment which will end in 5 years.

I did a quick look at saw companies like Ocean offering £40k for about £850 per month over 5 years.

Right now I'm paying £650 per month in credit cards but not paying off any of the real debt, at least a loan will be toast in 5 years.

I wondered if anybody had any thoughts about my best options and where/who to approach for this type of loan.

I would go to my bank but it's Virgin One account and they don't do loans!

DonnySaver

Simon,

Have you considered extending your mortgage- this is surely the cheapest option in terms of repayments on 40k ?

BoGoF

Your Experian and Equifax ratings mean absolutley nothing.

Is the Ocean loan secured?, because your chances of getting an unsecured loan for that amount, in my opinion, is zero.

Is that an actual quote from Ocean or just a 'typical APR example'.

You have not mentioned income, amount of debt you have, equity in house etc but no mainstream lender will lend for consolidation purposes on that scale.

Emmzi

you say you have more coming in than going out so that leaves you with surplus. Try the snowball calculator and see what the extra £200 would do to the credit cards?

Simon22

DonnySaver wrote: »

Simon,

Have you considered extending your mortgage- this is surely the cheapest option in terms of repayments on 40k ?

I did but they said since the crackdown they couldn't add another £40k to the loan because they had reduced their LTV significantly, I forget the exact numbers but it made it not possible.

Simon22

BoGoF wrote: »

Your Experian and Equifax ratings mean absolutley nothing.

Really, so credit ratings have no impact on getting loans?

Is the Ocean loan secured?, because your chances of getting an unsecured loan for that amount, in my opinion, is zero.

Yes, secured, I wouldn't have thought anybody would lend me £40k unsecured would they?

Is that an actual quote from Ocean or just a 'typical APR example'.

Just from their online calculator thing, it's not firm at all.

You have not mentioned income, amount of debt you have, equity in house etc

We have basically exactly £40k of debt, mainly from cards etc.

Income is around £5000-£6000 per month, occasionally more , but that's a realistic average.

Equity in house , I guess entirely depends on what it would sell for now but I suspect as low as £60k now, was well over £100k.

but no mainstream lender will lend for consolidation purposes on that scale.

Oh right, well this is exactly what I was after advice wise..

So a £40k loan just isn't viable for consolidation ?

I can show bank statements for a year back all showing significantly more coming in than out , would that help a lender?

Simon22

Emmzi wrote: »

you say you have more coming in than going out so that leaves you with surplus. Try the snowball calculator and see what the extra £200 would do to the credit cards?

I want to nuke them , dead, fed up paying £650 per month in interest essentially, the loan would at least kill them off in 5 years, which I'm all good with.

ILW

With only 60k equity, you are not going to get a 40k loan, unless poss well sub prime which will cost more than paying the cards down.

Emmzi

Simon22 wrote: »

I want to nuke them , dead, fed up paying £650 per month in interest essentially, the loan would at least kill them off in 5 years, which I'm all good with.

Great. But the advice you are getting suggests that is unlikely. So what is plan B?

Debt free wannabe board I think? Cut backs, frugal living, etc. And smart management of your current debts.

Malky

I dont think a consolodation loan is the answer here. If you can afford £850 per month, then its best to use the extra £200 against your debts. Will the loan (if you got one) really be gone in 5 years? Theres always temptation to spend on the cards again.
Also, why would you want to get further into to debt when trying to get out of it? You are looking to turn your current £40K debt into £51K. That is plain madness.
I'm sure with a bit of dicipline and snowballing, you can get out of this without getting in any deeper.

pauletruth

I think the debt free forum is your best bet. I personally would suggest that you really don't need to borrow anymore its only going to make things worse. however its unlikely that your going to get it anyway thats a heck of a lot of debt to have hang around your neck. your saying you have between 60-72k a year coming in. sorry but how are you getting yourself into so much debt on that wage.
try and pay them down one card at a time and then use it to clear the next.