Shocked isnt the word! Consolidation

jovisd79

I just called Lloyds tsb as I have a loan almost finished with them and wanted to double check if it was this month or next month. Anyways it got into bit of a conversation and I explained that this was the last of our loan and then we could concentrate on getting rid of the credit cards, the advisor asked if Id be interested to see what a consolidation loan to pay off the credit cards would be. Sure why not I thought.....

they looked as £13k loan to pay off all our credit cards and im just quoting these figures as i remember them coz im still in shock but the repayments over 5 years were £419 which wasnt the problem, it was the total amount repayable was just over £24k _pale_on something like 29.9%. I said thats akmost double the original loan and she didnt even bother answering me which said it all really.

Witout going into too much detail Ive worked my socks off to get all our loans paid off over the last 5 years after we were majorly financially let down by someone and getting rid of the loans leaving just the credit cards was light at the end of the tunnel but now I feel full disheartened:(

jason1231972

Newsflash: LTSB isn't the only provider of loans

If you are loan-worthy (i.e. depending upon what your current and recent credit history, income and affordaibility 'say' about you), there are loads more places where you may be able to get a cheaper loan.

Be aware, though, that headline rates (especially those under 10%) may not necessarily be offered. They're the rates reserved for Mr. Perfect Customer.

Shop around, but go easy on the credit applications.

It wouldn't make sense to accept anything that's higher than your credit card APRs, even if it offered the convenience of one monthly payment.

However, how does 24% compare to your credit card APRs??

tyllwyd

Have you looked at the snowball calculator on the whatsthecost website? Taking a £13K loan at nearly 30% interest sounds like a terrible deal, I'd be amazed if that was a sensible option for you.

dan160987

hi,

this happens quite a lot with lloyds. I have personal experience almost identical to this.
loan ended, was offered a consolidation loan of £13500 over 5 years 24% apr 398 per month.
I accepted then foolishly (due to a change i job and circumstance, though i do take responsibility) ran up my cards again.

my advice to you is to go through to the customer support service that lloyds operate. after paying the loan above for about a year i rang them and they immediately set up a "true" consolidation loan whereby they restrict access to your other lloyds credit facilities but at a significantly lower apr 8 or 9% i think, despite me being over extended in my opinion.

so worth a shot?

Idiophreak

jovisd79 wrote: »

now I feel full disheartened:(

Why? You didn't call up looking to take a consolidation loan, so how are you any worse off than when you started? I just don't get it...

david39

If you have credit cards that offer 0% transfers then juggle your debt between them to leave one 0% card with a zero balance.

Fill that card to the limit by transferring as much as possible from the others, then make minimum repayments to that and as much as you can off the others. This means you have a good chunk of your debt at the lowest rate possible (just the initial transfer fee) and paying off as much as possible of the higher rate cards.

When the 0% term expires, do the same with one of the other cards offering 0%. You must always ensure that you make at least the minimum payments each month.

As long as you don't start building the card debt up again, the total balance will fall at a good rate and, unlike the bank loan, it is easy to up your payments to suit your financial position and thereby pay it off earlier.

Most major cards offer 0% terms to their credit-worthy customers - you may need to ring and ask.

opinions4u

Debt invariably carries interest.

If the rate on the credit cards is less than you can raise an unsecured loan for, stick with shovelling money off the credit card debt.

Don't be disheartened. It's like pulling in at a motorway service station and seeing the price of fuel. But if you've still got fuel in the tank you don't need to top up at that price.

jovisd79

Idiophreak wrote: »

Why? You didn't call up looking to take a consolidation loan, so how are you any worse off than when you started? I just don't get it...

sorry probably should have explained a bit more......although i didnt call this time enquring about consolidation loan, it was on my mind that at some point after paying off all the loans that a loan would be the way forward to clear the credit cards. The way i saw it was that it would be a set payment with an end date rather than the continous accruing interest on the cards.

It just amazed me that the total amount payable was double the original loan amount. Obviously I'll look at other avenues now in the future, whether that be other lenders or simply attacking one card at a time with as much as i can while paying the minimum on the others.

bigadaj

jovisd79 wrote: »

sorry probably should have explained a bit more......although i didnt call this time enquring about consolidation loan, it was on my mind that at some point after paying off all the loans that a loan would be the way forward to clear the credit cards. The way i saw it was that it would be a set payment with an end date rather than the continous accruing interest on the cards.

It just amazed me that the total amount payable was double the original loan amount. Obviously I'll look at other avenues now in the future, whether that be other lenders or simply attacking one card at a time with as much as i can while paying the minimum on the others.

It's useful btu probably unusual to get the total figure, jus look at a mortgage you will end up paying a quart of a million for a hundred grand d house once, maybe if the total cost were looked at more often the. People migth think twice.

meer53

Don't know about other banks but when i'm quoting loan repayments, i have to quote the full amount of interest to be paid and the total amount which will be repaid.

shop-to-drop

Have you worked out the total amount you will repay as things stand at the moment with the credit cards?