Am I getting my pants pulled down over a consolidation loan ?

bruceybonus_2

I currently am paying back a 22k loan from lloyds tsb costing £423 a month for the next 4 years

I have a lloyds credit card with 7k on it costing me 170 a month and an MBNA card with 4k on it costing 150 a month. thus a total outgoing of 740 a month just on the 3 debts

The bank has suggested changing the loan to a 25k one, paying off the lloyds credit card and balance transferring the mbna one to it at on an offer for 6 months which would cost around 60 a month instead of 150....
( they are on about extending the existing loan up to 84 months in total )

My question is...

They want £536 a month for a further 84 months to do this!!!!
thats a whoppin payback of 45k on a 25k loan....

My thinking is...

get a 25k loan from a different provider for say 450 a month for 5 years ( payback 30k ish ), pay off the o/s 17k from the lloyds loan.. that would leave me with 8k ish to pay off the lloyds credit card and then do a bal transfer onto it at the offer and hey presto....

My bank is saying to do this is impossible....

what do you all think? or am i going potty?

bengalknights

I think with thhat hight a debt it would depend on your income but the chances of getting another loan would be slim unless you had a large salary.

boobies

Would any other bank lend you £25K, and at what rate?

opinions4u

Get the best deal for you.

If Lloyds TSB can't offer it and somebody else can, it's obvious what you should do. I'd be surprised if you could get more credit elsewhere.

More importantly, have you solved your overspending problem yet?

TrueUnitedFan

bruceybonus wrote: »

I currently am paying back a 22k loan from lloyds tsb costing £423 a month for the next 4 years

I have a lloyds credit card with 7k on it costing me 170 a month and an MBNA card with 4k on it costing 150 a month. thus a total outgoing of 740 a month just on the 3 debts

The bank has suggested changing the loan to a 25k one, paying off the lloyds credit card and balance transferring the mbna one to it at on an offer for 6 months which would cost around 60 a month instead of 150....
( they are on about extending the existing loan up to 84 months in total )

My question is...

They want £536 a month for a further 84 months to do this!!!!
thats a whoppin payback of 45k on a 25k loan....

My thinking is...

get a 25k loan from a different provider for say 450 a month for 5 years ( payback 30k ish ), pay off the o/s 17k from the lloyds loan.. that would leave me with 8k ish to pay off the lloyds credit card and then do a bal transfer onto it at the offer and hey presto....

My bank is saying to do this is impossible....

what do you all think? or am i going potty?

You would be going potty if you were on a 50k salary, thinking that you can get another 25k loan! :rotfl:

How much do you earn by the way? (If you don't mind me asking) depending on your income you should be able to get another 25k loan. If you can get one, don't put on the application that you want to loan to consolidate an existing loan, you might get turned down for it or you might get accepted for it but on a higher APR.

But what your thinking makes sense, you would be left with a just one debt to pay off as well as reducing your overall debt outgoings per month.

fozmcfc

You'll likely to need a huge wage of £100k plus to stand a chance of being accepted anywhere else.

That is because when looking at consolodation loans the lender has no guarantee you will pay off what is owed and therefore you could end up owing double what you already do, in your case 66k.

Sounds like your bank are saying ok, we will do it, but only on the proviso that you pay off your existing loan and card with us off with the money and transfer the other cards balance to us.

That way they guarantee you are only owing the £25k + the MBNA balance to them.

As for whether it's a good deal, well it will depend on the APR's of the cards and your current loan, you'll need to post more info for people to give you an opinion.

Stick around.

jonesMUFCforever

Whatever OP decides - one thing is certain he needs to cut down on expenditure FAST or he will be bankrupt in 18 -24 months.

bruceybonus_2

I earn around 39k, The overspending stopped long ago, this is just serviceing an existing debt especially where the cc is concerned. The whole idea of this is to reduce my monthly outgoings. I have no problems with paying the debt off ( thats the whole intention ), and I'm doing it to bundle all debt into one basket. so the new loan is to pay off the existing one and budle the cc in at the same time. ( at the current rate I dont think I could pay off the cc at any poijnt soon )...

what they are saying is that by extending the loan I have back to 25k, ( currently the amount owing is 17k to pay it off ), then using the additional amount raised to pay off the cc, then it'll cost me 530 a month for the next 7 years. I'd be left with one monthly payment, which is the aim of this....

It seems that this is a very expensive way to do it. as 530 over 84 months is just crazy. which is why i'm saying, if I got a 25k loan from elsewhere.. then use that to pay off the cc and the 17k, then technically I should be left with a lower monthly payment for a much shorter time ( say 5 years ).. Obviously, getting a separate loan could be very problematic.. so I may have to bite the bullet and get finacially !!!!!!ed by my bank. They say i can overpay on the loan, but I'm not sure how much difference this makes.

opinions4u

Don't Lloyds TSB personal loan agreements let you make overpayments?

If so, and assuming the interest accrual is impacted by any overpayment, borrow for the tern they suggest and pay the amount that a shorter term loan would require.

JimmyTheWig

fozmcfc wrote: »

when looking at consolodation loans the lender has no guarantee you will pay off what is owed and therefore you could end up owing double what you already do, in your case 66k.
...
As for whether it's a good deal, well it will depend on the APR's of the cards and your current loan, you'll need to post more info for people to give you an opinion.

Stick around.

I totally agree with this.

I've never really understood the concept of wanting one monthly payment rather than, in this case, three payments each month.
If it is in terms of budgetting / knowing what is in your account and what still needs to come out then set up a second current account. Your own bank should agree to this without you having to pay anything for it. You shouldn't need an overdraft on this account. Change your credit cards and loans direct debits to come out of this second account and set up a standing order from your first account to your second for the total of the three payments each month. You've then got one monthly payment going out of your main account which covers the three debts, and yuo've achieved this without adding years to your debt-free date.

As has been said, the chances of you getting another loan to clear these debts are pretty non-existant.
So your choices appear to be (1) carry on as you are and (2) take the offer from your bank.
The good news about the offer from your bank is that it will reduce credit card interest for 6 months. Great! But hold on, that's only 6 months. How long are you going to have this debt for? Years and years! It looks to me like your bank are trying to screw significantly more money out of you.

Is carrying on as you are an option (maybe with the single monthly payment via a second account as I discussed above)? Can you afford it each month?
If you don't think you can then do an SoA here and people will help you cut other costs so you can afford your current repayments.

JimmyTheWig

opinions4u wrote: »

Don't Lloyds TSB personal loan agreements let you make overpayments?

If so, and assuming the interest accrual is impacted by any overpayment, borrow for the tern they suggest and pay the amount that a shorter term loan would require.

I get the impression that the benefit of the bank's deal is the lower monthly repayments.