Have I got any options???

jay_jay_8

I had a loan taken out in Oct 2003 for £6000 paying 164.24 per month for 48 months at 14.9% apr

At this moment in time I still have around £4200 left to pay. It seems like forever when this dept will be paid off.

I didnt realise at the time, the interest will be added onto the oustanding amount on a monthly basis, and guess what I have just realised this.

Is there any way I can get a better deal anywhere else or do I just grin and bear it????

Any ideas or help will be appreciated.

Debt_Free_Chick

Depends ... what's your credit record like? Experian, Equifax & Credit Call.

What other debts do you have?

Do you have surplus money or savings you could chuck at this debt?

jay_jay_8

I have a good credit record, thats my opinion.

I have a student loan of which im paying around £70 a month.

I have savings of around £1700. I did ask if I can pay a chunk off at a time, unfortunatly not, they want it all paid at once.

Debt_Free_Chick

In which case, you have two options

Firstly, you could apply for a new loan with a lower APR. Make sure that the term of the new loan does not go beyond the end date of the existing loan. In fact, you want a shorter term to pay the debt off quicker

Or, you could apply for a credit card with a 0% introductory interest period. When that period ends, apply for another 0% card.

Ideally, whichever route you pay, you want to look to pay off the existing loan as soon as possible.

Does this help? Need any more info?

jay_jay_8

That does help, Thanks

The 0% Card sounds like a good idea, saves me paying any interest.

Any ideas which company would be the best, ie the best offer?

Thanks

Reaper

The 0% credit card route may sound attractive but the deals usually only last 6 - 9 months (with some exceptions). After that you need to keep rotating the debt onto new cards.

This issue keeps coming up (see the Credit Card forums) and here are a couple of pitfalls to look out for:

1) You need a good credit rating and not too much existing debt.
2) You may not be able to keep rotating the debt so you need to consider what you would do if you could not get another card. The last thing you want is to leave it on the card as the APR will be worse than you are on now.
3) There are often penalties paying off loans early. Check first as they can be severe.

Another alternative is low APR "life of balance" cards which solve point 2, at least.

I suggest you start by reading Martin's article.

EDIT: I should also mention that most cards will not allow you to transfer the loan debt directly to them. Egg and Virgin are examples of two that can be used because they will pay it via your bank account. Read Martin's article on Super Balance Transfers