To loan or not to loan???

coxy81

I've just been told I've got myself back in to the 'excellent' credit scores again (I don't know how I got out of them in the first place having never missed apayment etc)

I'm now looking to stop paying out to 5 companies and just get 1 loan. Is it best to apply for joint loans with my wife or should I go it alone? Need 25k to clear everything or 16k to clear mine and family car.

Also, who are the best lenders in the market for this sort of thing?

All advice gratefully received.

Tixy

Whether to apply in your name or joint names depends on how much you earn, how much wife earns. What debts are in your name, what in her name etc. What is on both your credit files. Whether either of you have financial associations with anyone else etc.

One thing to be aware of with consolidation loans is that any potential lender will consider this as additional debt on top of what you already owe. So if you have £25k of debt in your name and apply for a £25k loan they'll be assessing if you can afford repayments of £50k worth of debt - and comparing that to your income.

Getting a loan for £25k is pretty hard these days, there are lenders who will loan that amount unsecured but they are pretty cautious about who they'll lend it to - and the APRs tend to be higher than loans under £15k.

What are the APRs on all your existing debts? its not worth consolidating any that currently have an APR lower than you might realistically get a new loan for.

What is the rationale for wanting to only make 1 payment rather than 5 a month? or are you hoping to reduce the overall amount you pay each month?

coxy81

We're trying to free up some of the 'free cash' that we're supposed to have each month. Debts are basically 6k on ccards, high interest (will take 33.2years to pay off apparently) and 5k personal loan(can't be extended as was a graduate loan). A car @6k and a couple of other small things to pay. total £930 monthly now, loan for all will cost £500ish over 3 years. Much more sensible in my opinion.

Seems all so sensible to me......if only banks were quite as stright thinking.

BoGoF

First of all, your re-acquired 'excellent score' is totally meaningless so you can ignore that.

You have missed the most important piece of information - your incomes?

Tixy

coxy81 wrote: »

We're trying to free up some of the 'free cash' that we're supposed to have each month. Debts are basically 6k on ccards, high interest (will take 33.2years to pay off apparently) and 5k personal loan(can't be extended as was a graduate loan). A car @6k and a couple of other small things to pay. total £930 monthly now, loan for all will cost £500ish over 3 years. Much more sensible in my opinion.

Seems all so sensible to me......if only banks were quite as stright thinking.

A loan for £25k will cost a lot more than £500 a month for 3 years - assuming an APR of 10% you'd be looking at £810 ish.

Even a loan for just the debts above at £18k would be £580 at 10% over 3years.

..if only banks were quite as stright thinking.
Any potential lenders main issue is the risk of lending to you and you defaulting then on the agreement, not whether a loan would be cheaper than your existing commitments or cost you less in interest.

As a guide in the current climate its hard to get credit that will take you above 50% of your income. If that £18k debt in in your name and you want an £18k loan then thats will be seen as potential debt of £36k - you'll likely need to be earning £60k plus to get that sort of level of additional credit.

KingElvis

Unless you're Donald Trump or Alan Sugar, the banks will take one look at your debts and run away or jump out the window on fire etc....

Not a hope.