Faster way of clearing existing debt

terric

The_Boss wrote: »

... The settlement figure will be less than the current balance ...

Thanks again, I've never asked for a settlement figure before. Is there an administration charge for creating one? Also, if they give me a settlement figure, and I decide to carry on as I am for whatever reason, am I obligated in any way to keep to the settlement?

terric

JimmyTheWig wrote: »

If the interest rates are the same, you'd pay less interest in total with a £7500 loan over one year than you would with a £5350 loan over two years ...

This would mean increasing the amount I "owe" to borrowers. I know the interest may work out better, but I'd still owe more than I do now. There's a bit of a psychological boon to knowing you owe less I feel, and it seems more manageable to pay off.

If possible, I want to do this with 0% interest hopping so if I get to the end of that road and it doesn't work out, then I'll likely just stay as I am and try again in 6 months.

The_Boss

terric wrote: »

Thanks again, I've never asked for a settlement figure before. Is there an administration charge for creating one? Also, if they give me a settlement figure, and I decide to carry on as I am for whatever reason, am I obligated in any way to keep to the settlement?

There is no admin fee for requesting an early settlement fee and requesting the fee is without obligation - so it doesn't change anything about your current loan until you make the call to repay the settlement amount. If you don't make that call then the loan continues as it is.

terric

The_Boss wrote: »

There is no admin fee for requesting an early settlement fee and requesting the fee is without obligation - so it doesn't change anything about your current loan until you make the call to repay the settlement amount. If you don't make that call then the loan continues as it is.

Good stuff, thanks very much for the advice. I'll speak to RBS tonight and post the results :beer:

Tixy

Did your bank say what the APR they woudl offer you for a a new loan of £7500 over 2years or 18months?

How much less is it that your current APR?

It could be worth taking a new loan if the APR is lower, you can then straight away repay the £2150 'extra' to the new loan, leaving you with the same loan but with a lower APR.

And with the new loan you will be able to make any overpayments that you can afford.

The_Boss

Tixy wrote: »

Did your bank say what the APR they woudl offer you for a a new loan of £7500 over 2years or 18months?

How much less is it that your current APR?

It could be worth taking a new loan if the APR is lower, you can then straight away repay the £2150 'extra' to the new loan, leaving you with the same loan but with a lower APR.

And with the new loan you will be able to make any overpayments that you can afford.

...or the 0% route as detailed above...

JimmyTheWig

The_Boss wrote: »

...or the 0% route as detailed above...

Is the OP likely to get a £5k limit on a 0% card?

The_Boss

JimmyTheWig wrote: »

Is the OP likely to get a £5k limit on a 0% card?

I gave reasons why I think it is likely above. If not, the OP can use as much as they get to repay early. Remember that interest on the loan is most likely front loaded so any early repayments now will wipe more interest out.

JimmyTheWig

The_Boss wrote: »

I gave reasons why I think it is likely above.

So you did. I missed that.
Personally I wouldn't be so confident. Only one other card, with a limit of just £1000 that's pretty close to being maxed out. Personally I'd say a limit of £2k would be more likely.

If they can use this to make a partial repayment on the loan then it's worth doing. But you can't do that with most loans, can you?

The_Boss

JimmyTheWig wrote: »

So you did. I missed that.
Personally I wouldn't be so confident. Only one other card, with a limit of just £1000 that's pretty close to being maxed out. Personally I'd say a limit of £2k would be more likely.

If they can use this to make a partial repayment on the loan then it's worth doing. But you can't do that with most loans, can you?

They have also showed reliability from the loan account, possibly have a mobile contract too and their salary to debt and available credit ratio is very good. I'd say there is a very good chance. If not, then they can revert to the loan option through RBS although this should be very much a backup plan.