Loan v credit rating dilemma

smokedsalmon

Hello all, thank you for having me.

Apologies for the dump, but this has been keeping me up at night, so I hope you wouldn't mind offering a bit of advice.

I've been debt free for a number of years, but due to some recent financial difficulties with my OHs business, I've now got £5k debt on a credit card (16.9% APR), £600 overdraft on our joint account and a little bit of an overdraft with Natwest (£200 out of a £5000 facility). I also have a car loan (£11K) and joint mortgage. I'm slowly sinking into more debt as the months go by.

My current credit record seems to be very good, no defaults, no recent applications for credit etc. My income is about £27k before tax. OH income is unpredictable at the moment.

We would like to borrow £10k to pay off the credit card/overdrafts and have some cash left to tidy up our flat and pay for something else we desperately need. I'm thinking about the Sainsbury's Bank deal, as it's a great rate, particularly in comparison with my current overdraft and credit card rates.

However. We want to move house by the end of the year. My OHs credit rating isn't great and I must be mindful of our mortgage application. So i've been mulling over the options. Should I:

1) Reduce overdraft facility to reduce available credit, then apply for the loan and hope that I get it? (Is that likely?) If I do, will that then make me seem overstretched when it comes to the mortgage application?

2) Apply for 0% balance transfer card instead and use barclaycard plastic loan for the extra cash we require?

3) Don't apply for any new credit to be extra, extra careful in run-up to moving house.

(once we sell our flat we'll have some extra cash to pay off debts, but that might be six months away)

TIA for any ideas or advice.

AFK_Matrix

Right to start off your not going to get a 10k loan with the amount of credit you have at the moment and the salary your on. Lenders look to loan 50% of ur salary.

And also your existing debt will affect how much mortgage you can get.

And thirdly debt consolidation rarely works and most people get in worse trouble doing it.

So forget the loan, head over to the debt free wannabe section and see what you can cut back on to reduce your debt.

smokedsalmon

Thanks AFK, that makes sense and just writing it all down shows me the problems we have. It's all happened quite recently so just getting my head around it.

AFK_Matrix

I understand, sounds like your having your light bulb moment and that is scary specially once you start putting it on paper. But head on over to the debt free wannabe section as they are a good bunch who will help you as much as they can.