40K loan required best option?

Simon22

Malky wrote: »

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 to try and get out? You are looking to turn your current £40K debt into £40K + interest. This just doesnt make sense.

As explained above.

because the 40k loan will be toast in 5 years, currently I'm nearly paying the same monthly to credit cards which will be there forever.

I appreciate all the "live fruggally" stuff, what I'm actually after is hard advice on the best options to borrow this sum if, indeed it even exists as a viable option.

Simon22

ILW wrote: »

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.

I'm not trying to borrow from my mortgage lender.

Or do you mean loan firms in general use the equity as the overall guideline?

I can easily afford the payments, in fact I would actually be somewhat better off per month.

I presumed naively no doubt that if I Could show I could afford the payments easily that would be beneficial, ie providing bank statements but I'm new to loans like this, I was just guessing.

ILW

I would just chuck a grand or so a month at the cards. Ignore what the minimum payment says.

pauletruth

you have had it you have no chance of getting a loan of that level. any lender that would be willing to lend it is either a dodgy one or asking to go bust. you don't have a great credit recored your drowning in debt. borrowing to clear debt very rearely works. just suppose one of you gets made redundant how are you going to cover this extra secured borrowing. at the worst the cc and unsecured companies will just get stroppy. do that with a secured debt and your homeless.

Emmzi

look, Mr Stubborn.

If you put 40k at say 22% (reasonable credit card rate) into the snowball calculator is says it will be paid off in 51 months at £850 a month (your 650 + the 200 spare)

So 9 months earlier than your loan with no arrangement fees.

Why are you set on a loan when itt makes no financial sense and puts your home at greater risk of repossession if things go wrong?

Simon22

Emmzi wrote: »

look, Mr Stubborn.

If you put 40k at say 22% (reasonable credit card rate) into the snowball calculator is says it will be paid off in 51 months at £850 a month (your 650 + the 200 spare)

So 9 months earlier than your loan with no arrangement fees.

Why are you set on a loan when itt makes no financial sense and puts your home at greater risk of repossession if things go wrong?

I don't follow sorry.

I have 3 cards, they total £28k in value.

I am currently paying £650 per month towards all 3 of them and seeing virtually no serious reduction in the basic amount owed, perhaps £200 a month at best across all 3 (min payment).

Adding £200 per month, £2.5k per year, £12,500 over 5 years would only kill less than half off no ?

Can you give me the "for dummies" version of what your suggesting, what's a snowball calculator?

Emmzi

http://www.whatsthecost.com/snowball.aspx

Emmzi

plus, what do you want the extra £12k for? I suspect that is the real reason you are not considering other options.

pauletruth

so were has the other 12k gone. you say you have debts of 40k. does that include car loans ect.

Giddytimes

If you consistently have more coming in than going out you presumably have a large positive current account balance? Which you could put towards paying off the cards.
If that isn't the case then you can't have much more coming in than going out every month.

Have you tried swapping your credit cards to 0% balance transfer cards or fixed rate cards, to lower the interest and allow you to pay a larger chunk of the balance off?