Help me make a decision!

Mirtos

Hi Guys,

Long time no post I know!

I need some help in making a decison...

I currently have around
£7600 @5.8% costing £130/month fixed term loan
and
£4300 @3.9% costing £130/month M&S cc.

Recently I've taken a big cut in income and need to get the monthly cashflow manageable again. I'm budgeted up to the eyeballs and am a veteran of old style etc, so there aren't too many major savings to be made there - what I'm looking for is advice based on the figures here rather than what I *could* save in other areas. If that makes sense

I could transfer both debts to a northern rock flexible loan that would only cost me £145/month, but at 6.4% over a much longer period.

Now, I know that good MSE sense says 'stick with the low interest and get it paid off asap' BUT Cashflow is very very tight, in terms of day to day expenses, and as the Northern rock loan is flexible, I COULD overpay and clear it earlier if I was able.

My OH is encouraging me to get the new loan, but instinctively, I'm not so sure - especially as I've been working so hard in the last year to clear all this debt, and taking on a new 10 yr loan - even if I could clear it early, would be a bit of a psychological blow. Not to mention the extra interest. So chaps. What do you all think?

LookingAhead

I think if it wasn't flexible I'd be saying NOOOO but seems it is flexible, I can see why you're tempted.

Usually the thought of consolidation is enough to ruffle all our DFW feathers as it usually isn't the way forward, we've had that drilled into us haven't we?

But if it makes things easier and you know that you will not rack up debt before you can start to overpay it, then, I think I would go for it....if I really couldn't see things becoming easier in the near future and only if I was going to overpay later when I could.

that's just my two penneth worth but it might be wrong!

Annie_Fanny

How much longer have you got on your current loans? How are you managing at present with the £260 payments?

lynzpower

My advice would be - be very careful of flexible loans.

My OH has/ had one, and so flexible they put up his 6.2% to 14.9% over 6 months. as he was temping, he had no choice but to just overpay as fast as possible and thank god hes on his last payment in a few days. All this was completely legal, and poor OH had zero comeback, depiste me trying every which way, FSA, trading standards etc. to get them to try and sort it out but alas, there was nothing we could do.

Are you certain there are no other alternatives?

LookingAhead

lynzpower wrote: »

My advice would be - be very careful of flexible loans.

My OH has/ had one, and so flexible they put up his 6.2% to 14.9% over 6 months. as he was temping, he had no choice but to just overpay as fast as possible and thank god hes on his last payment in a few days. All this was completely legal, and poor OH had zero comeback, depiste me trying every which way, FSA, trading standards etc. to get them to try and sort it out but alas, there was nothing we could do.

:eek: :eek: Oh my GOD. I didn't know that they could do that. That's a nightmare.

Mirtos

I'm just about managing the £260, BUT I'm working nearly 50 hours a week. That won't be an option after the next couple of weeks and my pay cheque will decrease correspondingly. I suspect that really I should wait and see how I manage over the next month or so. I'm just having a bit of a panic. Thanks for the advice.

Lynz! - Hello lovely! how are you? I haven't seen you for ages. That's very scary about your boyfriends' loan. I think it's put me off for a bit. I'll see how I go.

Mirtos

Oh - 5 years left on loan. CC should be less at this rate.