how to overpay loan or consolidate?

qwertyjjj

So, near the beginning of the year I had 2 loans and 2 credit cards.
1 loan @9.9% £7.5k left
1 loan @18% £8k left
1 credit card 19% maxed at £2,6k
1 credit card maxed at £2.6k but 0%

Since then, I have managed to pay off the credit card and have £1.2 k left on the one that has only just started charging interest, that should be paid off by the end of the year.

How can I go about consolidating the loan at 18% to a smaller percentage?
It was taken out in 2012 so I believe I can make overpayments, the alternative would be to save up and pay off in full. I would prefer to consolidate it immediately and then overpay as it would cut the monthly payment by at least £100 if I could reduce the rate but as they are unsecured loan I doubt a bank would lend more given my current Fair credit rating (I can however prove enough money left over each month to pay it, it has never gone in arrears).

Any recommended paths to take?

dime81

What's the interest rate on the cc that's started charging interest? If it's less than 18%, just pay minimum on that and attack the 18% bank loan as much as you can. Don't save to pay it off in one go - the interest accrued will be more doing that rather than paying off the loan.

Try contacting the 9.9% provider and asking to take out a new loan to pay off the other one and the existing 9.9% (i.e. swap 2 loans for one totalling £15.5k). Depends what interest rate you're offered though, it may increase for a larger amount. They may only accept if they pay the other bank direct.

Use any saving in interest to pay the same monthly payment as the combined 2 previous loans (as you can afford it), which will reduce the term.

Alternatively make overpayments on a longer term loan, though you have to be disciplined for this! If no consolidation loan is available, just attack that 18% loan with as much as you can each month.

There used to be cards which allowed balance transfers into current accounts/overdrafts. Not sure if they exist anymore but might be worth checking your cards and the balance transfer rate.

qwertyjjj

rudipickup wrote: »

What's the interest rate on the cc that's started charging interest? If it's less than 18%, just pay minimum on that and attack the 18% bank loan as much as you can. Don't save to pay it off in one go - the interest accrued will be more doing that rather than paying off the loan.

Try contacting the 9.9% provider and asking to take out a new loan to pay off the other one and the existing 9.9% (i.e. swap 2 loans for one totalling £15.5k). Depends what interest rate you're offered though, it may increase for a larger amount. They may only accept if they pay the other bank direct.

Use any saving in interest to pay the same monthly payment as the combined 2 previous loans (as you can afford it), which will reduce the term.

Alternatively make overpayments on a longer term loan, though you have to be disciplined for this! If no consolidation loan is available, just attack that 18% loan with as much as you can each month.

There used to be cards which allowed balance transfers into current accounts/overdrafts. Not sure if they exist anymore but might be worth checking your cards and the balance transfer rate.

How realistic is it for a bank to accept that and pay off the other loan directly? TBH normally you ring up a call centre and they just follow what the computer says and credit check you and I know that if I get credit checked despite have never gone into arrears, I won't pass because of the amount of cash I have in personal loans (£15k now) so the buck will stop there despite the fact that consolidating would not increase the amount I had outstanding.

Also, I presume the provider most likely to go with this if they would is the one I have been with longest, ie over 12 months?

DCFC79

Re your last question yes your own bank is best bet as they know your account as good as you do.

qwertyjjj

DCFC79 wrote: »

Re your last question yes your own bank is best bet as they know your account as good as you do.

The bank is only doing loans if you have a current account with them, which ironically I just closed out 6 months ago.
And to open an account..you have to have a credit check.
Argh!

ecoverbee

At TSB you can overpay on loans even £1 but it doesnt bring the payments down only the interest so you will knock a few months of your loan.

Thanks
andy

qwertyjjj

Is it best to close one of the credit cards?
I heard that having 1 credit card paid off in full every month shows a better credit score than having 2 because it's just a potential debt amount?

However, I've also heard it doesn't matter, they just look at the percentage in use no matter how much,

fatbelly

rudipickup wrote: »

There used to be cards which allowed balance transfers into current accounts/overdrafts. Not sure if they exist anymore but might be worth checking your cards and the balance transfer rate.

http://www.stoozing.com/sbt.php

qwertyjjj

Just for future reference, the credit agency confirmed that closing a credit card would have a negative effect on the credit report as it may increase the % amount of credit in use compared to that available.
So, it's better to leave credit cards open but with a balance of zero.