Interest Rates on Loans

DriveBlind

Hi All,

In a bit of a mess at the moment, moneywise. I have around 20k of debt, mainly on Credit Cards and Store Cards. At the moment I am servicing all of the debt, making sure I don't miss payments etc. I earn about 45K a year, and no CCJs.

My plan, is to get a loan to pay the majority of this off at a lower interest rate, and then move the rest to a 0% card. And then cut all the cards up and start living with my means.

I've been offered two loan offers for 15K over 4 years 13.5% at sainsburys and 10.9% at Santander. This is obviously well over the advertised typical rates, and although smaller than the credit card rates, still quite a heavy rate.

As I have been accepted twice, I'd like to try some other lenders, but obviously, are worried about my credit file showing lots of searches. Will I be making things worse by applying for another lender in the hope of getting less than the 10.9% offered by Santander (my bank btw)

Pixie5740

You can certainly try applying with other lenders to see if you can do better than 10.9% APR but I don't fancy your chances with £20k of existing CC debt.

Lots of searches in a short space of time don't look great on your credit file. I think there's a tool on the MSE website somewhere that lets you do a soft search for loans which might help you narrow down which lenders to try.

dealer_wins

I would say post on the "debt free wannabe" board.

With that much debt you are living way beyond your means, and if you dont seriously cut your lifestyle back soon it will all come on top.

chambta

The credit card debt will flag you up as a higher risk.

There's a possibility that if you took the Santander loan and genuinely cleared the debt (and cancelled the cards) you could look to refinance in a year or so and be looked upon as a better risk.

Thrugelmir

Given your current debt level a 10.9% interest rate isn't bad. Unlikely you'll be offered much in the way of 0% offers at the current time. Looking into the future the days of 0% offers may be numbered.

Start learning to live within your means now. Rather than expecting finance companies to give you an easy way out.