DOes this seem logical?

Cheshire007

Hello,
dddddddddddddddddddddddd

redsaxon

In my opinion i would say pay the debts off and stall your move if possible,at least then when you do buy your home you will be debt free

CLAPTON

the loan will not help your mortgage application

pay off the CCs and continue saving like mad.

Cheshire007

Will the bank not see that I've managed the repayment if I were to get a loan, thus making me less of a risk?

redpete

Something wrong with your figures. £3000 at 32% is approx £80 a month interest, so you should be clearing £70 off the balance each month by paying the £150 minimum..

Is the Sainsbury's rate 'representative'? If so that means that at least 51% of accepted borrowers will pay that rate; if your own bank charge you 26% I think it is unlikely that you will get 12% somewhere else.

My inexpert guess is that should clear those debts before applying for a mortgage, you might find you are asked for a smaller deposit if you apply once the debt is gone.

Apples2

Cheshire007 wrote: »

and have around 3k outstanding.
I have 3k in the bank to cover these

I approached my bank for a 3000 loan which has been accepted, 114 over 36 months at 26% apr. :eek::eek::eek::eek::eek:

Seems completely illogical to me, madness almost.

Cheshire007 wrote: »

Plus a loan will help to rebuild my credit history.

Having lots of debt is in no way a good thing to have on your file when looking for credit.

You can't seriously be considering paying 24% interest when you already have the cash to clear it available???

Use your money in the bank to clear the lot and save like a nutter.

Cheshire007

Thanks for the replies so far.



lity check so far

Cheshire007

Ooh here's where the logic/ lack of logic comes in for being considered for a mortgage in Dec.

chris-j

Your figures just don't make sense. You are suggesting you will have another £9k in savings in 6 months time, yet you are only paying minimum to cards. Based on these figures even without using existing £3k savings you could clear cards in 2 months.
Rent of £1500 a month - live somewhere smaller for a snort time while you save.

Well done to pay off £16k in 2 years, must have been really disciplined, but don't go backwards now.

wwfc_2

It doesnt seem logical to me.

Surley your better off using your savings and paying off the debt unless you are getting 30+% intrest on it which i would hazard a guess your not.

Then open up an easy access cash isa if you dont have one and pile money in to that each month that you would of wasted on intrest payments.

Youll soon save the 3k and feel a lot happier for having no debt.

Well done on clearing the other debts

Joe_Bloggs

@Cheshire007

MSE Martin has an article here:- Repay Debts or Save. The 12000 deposit for December is an unrealistic goal as you are hiding from the 3K debt at 32% .

Consider paying off the Next card as soon as possible. This small step will not be too much of a dent in your imagined savings total. Watch out for later residual interest after you think you have paid off the balance.

You could then attack the aqua card reducing it by 50% in the next month and perhaps paying it off in the next after that. Don't let the emotional goal of a house deposit deflect you from sensible financial behaviour.
J_B.