Joint loan or individual loans?

echofall

My husband and I would like to take out a £12k personal loan to consolodate 5 credit cards as keeping track of 0% deals and when they end and then moving debts around is getting too cumbersome.

Which would be the best option? a Joint loan for £12k or to take a loan each for £6k?

Or does it not matter?

thanks

CLAPTON

what are your incomes

what do your credit records say

echofall

sorry for the delay.

Our combined income is @£55k
Our current credit card debt is @£18k
Our available credit (added up all the credit limits on the cards) is @£35k

We've never missed any payments and everything on our credit reports look fine.

thanks

HappyMJ

A loan for a higher amount usually has a lower interest rate. Borrowing £15,000 may get better interest rates which may be cheaper than borrowing £12,000. So I'd shop around and get the loan or loans with the lowest interest rate and pay off anything that incurs a higher rate of interest and close the accounts down as soon as they have been paid off so it doesn't look like you have as much credit available to you any more.

John1993_2

Because the lenders have no guarantee that you will use the loan to pay off the debts, they'll look at your total available credit as the sum of your existing debts and new loans. As a rule of thumb many lenders will be uncomfortable lending more than half of your income, so your £30k debt may well be too much on your current salary.

echofall

@ John 1993 I can reduce my credit limits if that will help, I don't need the £17k available credit on my credit cards. I was just keeping them as a back up so if we don't get the loan I can keep moving the debt around our existing cards on 0% deals.

@HappyMJ my plan is to pay off all of the credit cards except for one which has a lifetime BT rate of 3.9% on it. Which is why I only want a loan for £12k when our total debt is £18k.

We're more than willing to close all other credit cards once the loan is in place, I'm just worried about closed alternative solutions in case we don't get the loan (or loans) and then need them.

Do you have any view on which is better? a joint loan or two individual loans? Or are they the same?

Tixy

Do you have any view on which is better? a joint loan or two individual loans? Or are they the same?

By better do you mean cheaper? easier to get?

somethingcorporate

It's not very money saving to replace interest-free debt with interest-bearing debt like a loan.

Are you sure you really cannot be bothered to deal with the occasional balance shuffle to save a wedge of cash? The interest on £15k even on a low rate is still more than you need to be paying if you have the 0% balances available.

echofall

@Tixy I mean easier to get and looks better on our credit reports

@somethingcorporate when you take into account the 3% fees to move the debts every 9 months, it doesn't seem that much more expensive to have a loan at 5-6%. But we are still just considering what's best.

gb12345

echofall wrote: »

it doesn't seem that much more expensive to have a loan at 5-6%.

That assumes that you are able to get a loan at 5-6%. There is nothing to say that either you or your husband would be offered that APR. You might end up being offered 10% or even 15% if you aren't the type of customer the lender is looking for.

echofall

gb12345 wrote: »

That assumes that you are able to get a loan at 5-6%. There is nothing to say that either you or your husband would be offered that APR. You might end up being offered 10% or even 15% if you aren't the type of customer the lender is looking for.

How does it appear on your credit report if you're offered a loan but choose not to take it, in case this does happen?