Thinking of taking out a loan - advice needed!

ninetyfables

Hello, 22yo here, beein thinking of applying for a £1000 loan from halifax to pay off various things which I will elaborate on.

However, my debts include £790 on an old student overdraft with natwest. Due to a mixup with student loans and me eventually not completing university, I never got my loan paid into my natwest student account, resulting in them eventually making me pay back the £1000 (fair enough). The debt was passed to moorcroft because I was unable to payback the amount in full, and I have been paying back Moorcroft at £20 a month (slow!!). Will I be accepted for a small loan with this presumably on my credit report? I admit I'm a bit scared to get one in case it's all doom and gloom. I never recieved any kind of official default notice, but I've read elsewhere on here that they don't always issue them.

My second debt is not strictly a debt, but I'm stupidly stuck in the payday loans cycle for amounts around £100 - £150. I always repay early, but then find myself short before payday and take out another. I know this is stupid! Having the loan would enable me to put an end to both of these debts and pay back an amount I can afford monthly. (Am I being naive?)

I recently upgraded to a current account with Halifax (never upgraded a cardcash when i turned 18), and I recently took on renting a house with a letting agent which required a credit check which offered some hope.

Is it worth me applying and possibly getting declined, or would I be better off biting the bullet one month and going short for the payday loan?

gb12345

With a possible default and regular use of PayDay loans, you're going to be hard pressed to find a reputable lender that will touch you. Not to mention the fact that £1,000 is below the lower limit of most loans.

If you can't afford to pay back £150 then do you really think that you can afford a loan at the APR you are likely to be offered (if at all).

You would be better off flogging a few things on eBay to pay off the PayDay loan and then look at the cause of your repeated need for PDLs and how you can cut costs in future.

ninetyfables

Ahh I wasn't factoring in that payday loans would appear on a credit report.

The repayment on the halifax loan I was looking at were around £50 -£60 to memory, which is a hell of a lot more affordable than paying a wonga every month (if I was offered such repayment terms).

Thanks for the help, I guess it would be better to make up the difference elsewhere.

dresdendave

Borrowing to pay off debts is not really paying your debts, it's just swapping them to a defferent lender. Having said that I'd rather owe money to the Halifax than to Wonga. As mentioned by gb, you are unlikey to get a mainstream loan now you are bogged down in the world of PDL's.

Best policy would be to slash all spending to essentials only until you can clear the PDL. No nights out, alcohol, tobacco, snacks, new clothes, drinks at work etc. The DFW board is great for this kind of advice.

Also try to increase you income, can you get extra hours, overtime at work, could you get bar work in evenings, weekends? You could even print out cards for neighbours offering to cut grass, clean cars, do ironing etc.

Basically get shot of the debt and try to analyse why you got caught in the PDL trap and vow never to make the same mistakes again.

Obviously a lot of the above advice is generic, not knowing your exact circumstances, but the basic principles are sound.

R_P_W

A pay day loan is a debt.....probably one of the worst kind!

Caz3121

what is your income?
have a look at the debt free wannabe board, look for ideas for anything you can cut down on to free up money to throw towards the debts, maybe look at a spending diary to see where your money is going

DCFC79

What was the use for the pdl ?

Did you have an expensive bill or something ?

Its alright saying get a loan to pay the debts off off but what happens next month when you find your short again and have to use wonga ?

Look at your spending, maybe complete and soa and post it on the debt free board.

tonkinator

What are the intetrest rates on the debts that you want to pay off, please?

If you can list them, then people can suggest what rates it's worth you accepting, if the lender accepts your application.

There's no point in taking £1,000 to pay off £1,000 worth of other debt if it means you repay more in the long run.