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Should I extend loan to make life easier?

gingabyte
gingabyte Posts: 12 Forumite
Hi,

I current have a loan which was for a car which started at £6100 but according on online calculators is around £4200 now with 15 months left out of 24.

I also now share a house with someone unlike when I took the loan out and was living at home. Due to all the bill rises etc I can now only just pay everything and get left with very little at the end of the month.

I recently had an expensive mot so now I am £900 into my overdraft and don't have any spare money to chip away at this.

I do have a good credit rating and was thinking that it would make my life better if I was to take out a loan to replace my current one and then add on the overdraft amount and pay it over a slightly longer period. For example

£4200 on current loan
£900 overdraft
Total = £5100

Over 2 years is £230 a month
over 3 years is £160 a month

My thinking is that although I would be paying more interest extending the time would help me as not only would I have cleared my overdraft but I will also have lowered the amount I'm paying into the loan each month giving me some room to breath

What do you think?

Thanks
Chris

Comments

  • DCFC79
    DCFC79 Posts: 40,635 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    gingabyte wrote: »
    Hi,

    I current have a loan which was for a car which started at £6100 but according on online calculators is around £4200 now with 15 months left out of 24.

    I also now share a house with someone unlike when I took the loan out and was living at home. Due to all the bill rises etc I can now only just pay everything and get left with very little at the end of the month.

    I recently had an expensive mot so now I am £900 into my overdraft and don't have any spare money to chip away at this.

    I do have a good credit rating and was thinking that it would make my life better if I was to take out a loan to replace my current one and then add on the overdraft amount and pay it over a slightly longer period. For example

    £4200 on current loan
    £900 overdraft
    Total = £5100

    Over 2 years is £230 a month
    over 3 years is £160 a month

    My thinking is that although I would be paying more interest extending the time would help me as not only would I have cleared my overdraft but I will also have lowered the amount I'm paying into the loan each month giving me some room to breath

    What do you think?

    Thanks
    Chris

    Have a good credit rating you say, have you looked at this ? Any defaults ?

    Whats your salary ?
  • gingabyte
    gingabyte Posts: 12 Forumite
    Hi,

    Yes good rating checked this and also came back as very good when checked for moving into this house. My salary is £18,000
  • DCFC79
    DCFC79 Posts: 40,635 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    gingabyte wrote: »
    Hi,

    Yes good rating checked this and also came back as very good when checked for moving into this house. My salary is £18,000

    Speak to your own bank to see if they will help you out ?

    You looked at where your money is going ?
  • gingabyte
    gingabyte Posts: 12 Forumite
    my bank have offered me loans before but I have always gotten a cheaper rate elsewhere. I have gotten my finances down to just the bare minimum going out, so no luxuries such as Sky etc Ta
  • DCFC79
    DCFC79 Posts: 40,635 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    gingabyte wrote: »
    my bank have offered me loans before but I have always gotten a cheaper rate elsewhere. I have gotten my finances down to just the bare minimum going out, so no luxuries such as Sky etc Ta

    On 18k how are you in your OD ?
  • gingabyte
    gingabyte Posts: 12 Forumite
    all my house bills, running car(needed), current loan uses nearly all my monthly incoming. I also just had a car bill for £900
  • DCFC79
    DCFC79 Posts: 40,635 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 14 June 2012 at 11:41AM
    gingabyte wrote: »
    all my house bills, running car(needed), current loan uses nearly all my monthly incoming. I also just had a car bill for £900

    Yes the car bill, was everything on the bill needed for it to pass the mot

    re extending the loan i cant answer
  • gingabyte
    gingabyte Posts: 12 Forumite
    £500 was a short while ago when the roof of my car which is all glass decided to shatter into 1000 pieces. Thats was the cheapest price so garage bill was £300 and something which wasn't a bad price
  • DCFC79
    DCFC79 Posts: 40,635 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    gingabyte wrote: »
    £500 was a short while ago when the roof of my car which is all glass decided to shatter into 1000 pieces. Thats was the cheapest price so garage bill was £300 and something which wasn't a bad price

    Sorry for the questions. If your sure you can get a loan which is £160 a month then go for it if you can get a decent apr.
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