High interest rate loan

dumpyboy

If you took a loan out at 49.9 percent out from a sub prime lender would that have a negative effect on your credit file even if all the payments were made or a positive effect that after a couple of years you could get a lower rate one with mainstream and settle it

Pixie5740

Do you mean a sub-prime loan like a pay day loan? Pay day loans don't look great on your credit file as they give the impression that you can't mange your money from one month to the next. One PDL wouldn't be so bad but lots of them would look pretty dire.

You don't need to take out a loan with a high APR to rebuild your credit. A much cheaper option would be to apply for a credit building credit card, which will have a high APR, but as long as you repay the balance in full and on time every month you won't be charged any interest.

dumpyboy

Not a payday loan looked at a hippo loan for for 7000 for 5 years can not get a credit card want to get rid of 2 accounts on arrangement holding me back from everything can not even get a phone contract ,thought if took this out would say 2 years I be able to get a better rate pay this off , think in it would be better to pay 7000 in interest even if went for 5 years if I ended up with a better credit file

DCFC79

Get a sim only deal and buy a sim free phone, no need for a phone contract.

dumpyboy

I have a pay as go phone it s not the point I spent 8 years of my life in this I want a solution to rid me of the accounts in prove my credit file in the long time not have this round my neck for another 8 to 10 years find the accounts are gone and at 58 nearly 20 years after 2007 being still blacklisted and not able to obtain any thing .i ve been advised to stop paying till default registered then should be gone in 6.5 years don not want to do this after 8 years of hell and strugleing

Pixie5740

I understand what you'd like to achieve but I'm not sure this a Hippo loan is the best way to go about it. When you say the interest on the loan is 49.9%, is that the APR? If so then your monthly loan repayments would be £318.74. Do you have that kind of money spare every month at the moment? If not then you'll just end up defaulting on the loan and you'll be back at square one again. If you can't get another loan in 2 years time and have to keep repaying the Hippo loan you'll end up repaying an eye watering £19,124.38 for a £7,000 loan. Ouch!

How much interest are you paying on the debts you're currently servicing as there's no point turning it into more expensive debt?

It sounds like you should speak with The National Debt Helpline, Step Change or one of the other debt charities for some advice.

If you need some inspiration then pop over to the Debt Free Wannabe board and have a read at some of the diaries. You might find some solace reading about people who've been where you are now, and have managed to take control of their finances and kicked their debt into touch.

Good luck getting your debt situation sorted out.

[Deleted User]

dumpyboy wrote: »

think it would be better to pay 7000 in interest even if went for 5 years if I ended up with a better credit file

You wouldn't pay £7,000 in interest.

You would pay £12,124.38.

dealer_wins

The loan you are considering would be financial suicide. (And you would almost certainly be declined anyway)

Do as others have said and post a full SOA on the "debt free wannabe" board, you will get great advise as to the best way to get out of your situation.

dumpyboy

I know it is an expensive solution but do you think it would in prove my credit file in the long term and if settled in 5 or 3 years will it show who it was with and the interest rate it was

Gaz83

Any settled credit account will show that you are capable of managing credit.

That being said, it isn't just an expensive idea. It's also an incredibly, incredibly stupid idea.

ETA: To give you an idea of how stupid, after two years (when you're looking to get a mainstream loan), you'll have paid a grand total of £7,632 to your loan, and will have only paid off £1,014 of the principal - you'll have paid over £6,600 in interest alone.

Pixie5740

dumpyboy wrote: »

I know it is an expensive solution but do you think it would in prove my credit file in the long term and if settled in 5 or 3 years will it show who it was with and the interest rate it was

No the interest rate won't show on your credit file.

How much are you paying towards your accounts on arrangement at the moment? Is it more or less than the monthly repayments for this Hippo loan you're thinking of getting?

I just don't see how taking on more, incredibly expensive debt, when you are struggling to service the debt you've already got is a good idea. I don't think you'll find anyone on the MSE forum who will agree that it's a good idea.

Can you repay your current debts faster and then look at getting a credit card to help rebuild your credit file in a year or two?