Advice needed about loans and debt consolidation

robbiesbigtoe

Any advice would be much appreciated.

Me and my partner are trying to sort out our finances, at the moment we have around £6000 on credit and store cards. We are two years into a five year loan of £10000, with the outstanding balance of around £6000 remaining.

The repayment on the loan is £170 per month, but the minimum payments on the other debts amount to around £320 per month.

I have a mortgage and my partner has sub prime credit at the moment mainly due to being at the limit of his available credit. What would the chances be of extending the loan back to 5 years and to £12000, using 6k to pay the outstanding loan balance and the remainder to consolidate debt. Leaving us with a monthly outgoing around £230-250 for everything.

I earn £22000 my partner £27000, we have a one year old child who obviously accounts for some outgoings.

Any sensible none condescending advice would be greatly appreciated,

Thanks

Tixy

I would think the chance would be not great.

Are you financially associated on your credit files?
Is the current loan joint or in your name?

If just in your name how much of the card debts are in your name?

Who is the loan with?

robbiesbigtoe

we are not financially associated on credit reports/files.

Current loan in my name only (together with mortgage)

Half the card debts are in my name too -£3k


Loan is with TEsco

Tixy

If you haven't made any recent credit applications I guess it wouldln't hurt to try applying to extend the loan.

Banks aren't as keen to keep extending loans as they used to be and some posts have indicated that certain banks will almost always flat refuse and say the current loan must be paid off first.

But I can't recall seeing anything like that for tesco, though I can't recall that many posts about tesco loans at all. I guess it would be worth asking them the question in general by phone rather than making the application online to start. That way if they say it will e flat decline without even applying you won't have an unecessary credit search.

robbiesbigtoe

Tixy wrote: »

If you haven't made any recent credit applications I guess it wouldln't hurt to try applying to extend the loan.

Banks aren't as keen to keep extending loans as they used to be and some posts have indicated that certain banks will almost always flat refuse and say the current loan must be paid off first.

But I can't recall seeing anything like that for tesco, though I can't recall that many posts about tesco loans at all. I guess it would be worth asking them the question in general by phone rather than making the application online to start. That way if they say it will e flat decline without even applying you won't have an unecessary credit search.

i just noticed this on there site:

Existing Tesco Loans Customers

Are you an existing Tesco Loans customer? Would you like to borrow more? If so, we could help. You're eligible to apply to borrow more after you've made eight consecutive monthly payments on your Tesco Loan.
Special Reduced Rate - You could get a special reduced rate of 6.0%APR representative as a thank you for being a loyal customer.
Just call us on 0845 600 6016 to speak to your friendly UK loans team, and see how you could borrow more.
Lines are open Monday to Friday, 8am-8pm, Saturday and Sunday, 9am-5pm.
See the Summary Box for further details.

Tixy

Too late to call tonight but worth a call to them tomorrow to see what they'd say and whether you'd qualify.

It could still be a problem based on affordability for you factoring in current debts. Whilst you want to consolidate they'll treat the extension to the loan as extra credit on top of what you already have - in case you don't use it to pay the cards, or in case you max them out again.

So if £9k is your current debt then you'll be looking at £15k debt with the extension which is high for your salary.

Also watch out for them hiking the rate to a higher APR than your existing loan and it ending up very expensive.

I'd probably put together a list of your debt balances and APRs before you call so you can refer to that and ensure you don't end up paying far more in interest than you are prepared to do so.

Poosmate

You say the existing loan remaining balance is around £6k, is that a figure you've worked out yourself based on how much you've paid off or is it a figure provided by the loan provider?

I ask because some loans have the interest front loaded which means for the last 2 years you've probably been paying off mainly interest rather than the loan. If you take out a new loan you may well be setting yourself up to paying all that interest and more all over again.

Poo

Edit: just done a quick calculation and £170 x 24 months = £4080. I think you'll find the balance on your loan is a bit more than £6k(ish). What was the FULL amount repayable on the loan (not what you loaned but the full amount including interest)?