To borrow or not to borrow?

BillJones

ben-dover wrote: »

...We have the best part of 16K tied up in several, read as lots, credit cards, and 5.5k of loans...


...Anyway enough back story. I could, subject to being accepted, borrow 20k and clear my debt...

No you could not. You could transfer your debt between accounts.

You might think that this is semantics, but it really is not. You do not clear any debts by borrowing money. It just doesn't work like that.

ben-dover

Bedsit_Bob wrote: »

.

You existing debt, plus the £20k you wish to borrow, adds up to £41,500.

Do you earn £90,000pa ?

Banks etc never seem that interested in what I earn, but in short no I don't, I have several credit cards with stupid limits on them, if I added up all my credit cards I could probably borrow over 55K+ That's just on my credit cards alone. At our best, or worst depending how you look at things, we had approx 53k in loans and credit cards.

In my head I knew a new loan wasn't right I just needed the crazy idea confirming!

If I get chance I'll take a look at the snowball calculator, I've done something similar on a App I had and it does make a huge difference I know.

While I'm saving over £400 on loans that have been paid off, my Wifes wages have dropped by approx £200 PCM so while I'm still 'up' it's not as much as I'd like.

ben-dover

BillJones wrote: »

No you could not. You could transfer your debt between accounts.

You might think that this is semantics, but it really is not. You do not clear any debts by borrowing money. It just doesn't work like that.

I think you're getting a little hung up on the word 'clear' I KNOW the debt would still be live just with a different provider, but my credit cards would be clear and once they're clear ie the money is no longer owed on them I can lock them away, burn them.

[Deleted User]

ben-dover wrote: »

While I'm saving over £400 on loans that have been paid off, my Wife's wages have dropped by approx £200 PCM so while I'm still 'up' it's not as much as I'd like.

Even £200pm extra will make a difference.

Caz3121

OP - have you run through the snowball calculator in post #7
You may find that, if you direct the spare money to the right places (highest interest first) you will be clear in under the 5 years that a loan will take

[Deleted User]

With a bit of economising, the debts could likely be cleared even quicker.

It all depends on how determined and dedicated the OP is, to clear them.

Posting an SOA would be a good place to start.

ben-dover

Well a quick update, I didn't want to go down the new loan route but it kinda just happened!

I was sat in a cafe and applied via my mobile banking app, no less than 5 mins later I had 22.5k sitting in my bank account! less than 24 hours after that I had spent 22K 'paying off' credit cards, loans and overdrafts!

Now I know in the long run I'll end up paying more in interest (loan rate is 9.?) but it suits me for the next 12-24 months as I have a fixed payment plan.

the scary thing is that several of my credit cards have raised my limit, theoretically I could run up approx another 45-50k just on credit cards!

Should I close these accounts or will this have a negative effect on my credit score, which is brilliant!

marcarm

Personally I would close down all of the cards, then the temptation is not there to spend on them.

Thrugelmir

ben-dover wrote: »

Should I close these accounts or will this have a negative effect on my credit score, which is brilliant!

Close them . You don't want to waste your hard work. Far too easy to re offend.

redpete

ben-dover wrote: »

Well a quick update, I didn't want to go down the new loan route but it kinda just happened!

No it didn't, you just kinda decided to apply and got the loan. (which noone thought was a good idea when you asked for advice about it.)

Should I close these accounts or will this have a negative effect on my credit score, which is brilliant!

Close most of them. Having less available credit would probably improve your credit rating. Even if it didn't, a good credit rating is only useful if you want to borrow more money - and you don't want to do that do you?