Replacing loan advice

leedsfan_3

Hi guys, the details, I have one year left to pay on a loan paying 196.00 a month. In addition to that I have a loan where I am repaying 318.00 a month and started that loan a year ago and that loan will continue for another 3 years. I also have a credit card owing 1118.00. So quite a lot in total really and it would have made more sense to consolidate the first loan into the second but that's my fault.

Anyways I recently had just that idea but was turned down flat because of the existing debts. So I had an idea that I will now repay the first loan in full and the credit card, wait a month or so and then seek to consolidate the second loan at a lower APR (I pay 12.39%) currently on that one.

However the advice i seek is because of 3 reasons, firstly the unsuccessful attempts (there were 2) occurred in the last 3 months. How long will these blight me? and secondly I have started a new job, it's a permanent job, but nonetheless it's brand new, will this greatly effect me do you think?

I live with parents and shall start on a salary of 19.000 rising to 20,000 after six months. Also when it comes to shopping around, how can we really shop around when every personal quotation leaves a footprint?

Sorry for all the questions but hope that someone can put me on the right path.

CLAPTON

surely with 19,000 coming in and living at home you will be able to clear the CC debt is a few months

it seems that your total debt is in excess of 10,000 ; with an income of only 19k it's unlikely that anyone will lend you any more money (even if you intend to consolidate the debts there is nothing forcing you to do so.)

rachelonna

with your current income, I think you're going to find it difficult

I will wait for another 4 months (6 months since your last attempt), repay the credit card in full and that should help. There wouldn't be much point trying to get another loan for the 1-year loan

This said, you could then try to get a Virgin card after the 4 months have passed - this allows you to put money into your bank account to repay the loans, and then that may make things easier

This said again, the fact that you have a 6-month probation may make it more difficult if lenders want to see any paperwork related to your jobs

So I would be patient and repay slow but surely, and get rid of the debts within the next couple of years (repay the 3-year one early)

leedsfan_3

Hi, I don't know if you have misunderstood perhaps? I intend to repay the 1 year loan and credit card before looking to consolidate the one existing loan with a cheaper APR.

CLAPTON

I'm not really sure you can 'consolidate' a single loan but of course you can replace in with a new one

so if you pay off your first loan and the CC what debt will you then have?

leedsfan_3

Sorry, you are right! I don't know why I described as consolidating. I will then have the one monthly payment of 318.00 and that only, so yes, ignore the consolidation part lol

Apples2

Can you make overpayments on your larger loan?

When you have cleared the smaller one, you will have another £198 a month to throw at the larger one, when the Credit Card is clear you will have even more. You could double your monthly payments to it and clear it in half the time.

Further borrowing seldom works.

leedsfan_3

Since my gaffe has been pointed out, I have changed the title. I don't "need" this loan, it just made sense to reduce my overall payments. I could double the repayment of the loan, that is a possibility The only issue there is I don't know if that will reduce the total amount I pay back, if it doesn't, then it's not an exercise worth pursuing.

CLAPTON

leedsfan wrote: »

Sorry, you are right! I don't know why I described as consolidating. I will then have the one monthly payment of 318.00 and that only, so yes, ignore the consolidation part lol

much much will you then owe?

leedsfan_3

Well, I will then owe 11400.00 (over the course of 3 years)

Cat2011

Interest is likely front weighted on the loan, so the sooner you overpay, the less interest you will pay. Paying off the loan early will likely reduce the total amount paid, but that amount will be variable depending on when it was paid. You're probably better off using the credit card and loan 1 payments to overpay this loan, rather than apply for a 3rd loan, with the possible refusals, and then even if successful, having 3 loans on your credit file.