catriona79 wrote: »
I had a meeting with my mortgage advisor at the bank today and came away with an alternative to this slog. It doesn't even look that costly.
If I were to borrow £10k as a homeowner loan (a small tracker mortgage), that would be at the rate of 3.69%. Paid over 5 years, that would be £183 a month. The interest would be £967 over 5 years, so about £200 per annum.
If I overpaid regularly by, say, £300, then that would reduce the term of the loan to 1yr and 10 months and the total interest would be £349.
Now, I'm thinking its not such a bad deal.
1. financially... If I were to keep switching 0% cards, then I'd have to pay around 3% anyway, and I don't get the super-long deals anymore, and end up paying the BT fee and only get a 0% deal for 12 months.
2. Credit rating wise. I have recently been refused a Halifax card. Maybe I could try for the virgin card for 27 months, but what are the chances that I get it? Also, it impacts my credit rating, due to the amount of unsecured debt and refused applications.
3. Psychologically - the stress is huge. I find myself thinking too much about my debt. I waste about a couple of hours each day thinking about it.
Maybe, with the Tesco card which has no transfer fees, a new trend has been started and more banks will start offering these deals. But who knows...
I think it would be so much better to be able to finally live a little and not spend my life thinking about debt. Otherwise I will look back on my 30s and regret not having had fun.
I could build up a buffer of savings and feel more secure. I wouldn't even need to overpay in months where I wanted to go on holiday. And even if I didn't overpay most months, that's wouldn't be so much of a problem.
If it was at a huge price, then maybe I'd keep putting all this pressure on myself, but there is not that much in it, really.
Off to do some sums...
dktreesea wrote: »
A £10k homeowner loan sounds quite good to me. Are you sure though, if you apply for it, that you will get it? Nothing ventured, nothing gained, and in one way if you apply and don't get it, you are no worse off, but just in case you didn't get it, how would it affect you them moving onto the next round of 0% interest free cards in the new year?
I don't see why you wouldn't get it. What is the mortgage advisor saying should be your reason for getting the loan - as a consolidation loan or to do improvements to your house? I suspect your application would go better if you were to get it to build a patio out the back and, say, install double glazing throughout....or even adding a conservatory. Banks love loans given for improving the value of the underlying asset.
I have a loan similar to this, over 8 years, also at a low interest rate. I never spare it a thought. It's the one debt that I think is value for money.
cwal wrote: »
Just thought I'd pop in and say well done for paying off more of your debt!
Good luck with the mortgage meeting tomorrow, it sounds like a good idea and would take the strain off having to find new 0% cards which I always find is a worry, also if it allows you to make unlimited overpayments then I don't think you can lose as you can just throw any money you can at it.
To get some savings behind you could you for the first couple of months just make the minimum payment and then save the difference? Even though I have a lot of debt to clear I still saved some money behind me as living on my own I was worried that if anything went wrong I'd be putting more money on a credit card to sort it and that wasn't a good feeling so I can understand where you are coming from.
Hope the day improves for you!
It's giving out free £30 food vouchers
This Forumite's mattress is in need of a base
Via Tesco Clubcard vouchers