Loan v's credit cards

charliespad

Hi new to this I am in around £6000 of credit cards I have managed to get a loan to cover these and pay them off is that the best thing to do at the moment only paying above min payment. Thanks y

Ebe_Scrooge

It depends largely on the APR. Assuming your loan is from a reputable lender, I'm guessing the APR on the loan is less than that on the cards. If so then yes, it's generally a good idea. You'll pay less interest on the loan. With the caveat that you need to work out the total cost of credit - I assume the loan is over a few years ? So you'll pay a lower APR, but over a longer period of time. Still, if you're paying little more than the minimum on your cards each month, it'll still probably work out better.

It's fairly simple to work out - the loan paperwork will detail exactly how much interest you'll pay over the term of the loan, and you can calculate how much you're paying on the cards with your current payment schedule.

BUT - don't use the loan to pay off the cards, then promptly start spending on them again !!

charliespad

Thank you!!

Yes low apr as got the tesco loan so, just want to wipe the slate clean I will keep one card for emergencies and close the others.

Thank for your help xx