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Secured loan
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Myself and my partner are thinking about taking out a secured loan. Between us we have around £36,000 of unsecured debt, a mix of 1 loan and the rest over several credit cards.
The loan plus minimum payments comes to £1050 a month between us. We can just afford this every month but it leaves us with next to nothing once food and bills are paid. I did a quick loan check and we could get a £36k secured loan for around £400 a month over 10 years.
We have a house worth £175k and owe 100k on the mortgage.
Are these loans as bad as people say? The way we are looking at it, is take the loan, pay £400 a month out, we are £650 better off per month. Then cut all the credit cards up and never take out another loan.
Also can anyone recommned a decent company to go with who have good interest rates.
The loan plus minimum payments comes to £1050 a month between us. We can just afford this every month but it leaves us with next to nothing once food and bills are paid. I did a quick loan check and we could get a £36k secured loan for around £400 a month over 10 years.
We have a house worth £175k and owe 100k on the mortgage.
Are these loans as bad as people say? The way we are looking at it, is take the loan, pay £400 a month out, we are £650 better off per month. Then cut all the credit cards up and never take out another loan.
Also can anyone recommned a decent company to go with who have good interest rates.
LBM 16/03/2015:eek:
Starting debt £27926 :mad:
Current debt £25705
Aim to be debt free by 03/2021 :beer:
Starting debt £27926 :mad:
Current debt £25705
Aim to be debt free by 03/2021 :beer:
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Comments
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You're effectively adding another £12,000 onto your debt by taking out a secured loan.
Have you examined snowballing your debt? Have you thought about making overpayments to a secured loan if you do get one?"Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."0 -
what is snowballing debt?
We hadnt thought of over paying, just paying out the monthly payment for the 10 years.LBM 16/03/2015:eek:
Starting debt £27926 :mad:
Current debt £25705
Aim to be debt free by 03/2021 :beer:0 -
Just over a year ago you posted on the DFW board with £24k debts, and despite their good advice and your own good intentions, you've now got £36k debts? Further borrowing isn't the answer.DFW Nerd 0350
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there is a snowball calculator where you look to applying the most money to the highest APR debt and once that is cleared move on to the next. Makea your repayment money work hardest for you. It gives you an idea when you might get debt fee - I bet it is less than 10 years.
£400 pcm for 10 years means paying back £48,000 on £36,000 borrowing - a whopping 12 grand cost to be in debt for another 10 years.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
Just over a year ago you posted on the DFW board with £24k debts, and despite their good advice and your own good intentions, you've now got £36k debts? Further borrowing isn't the answer.
No I haven't gone up from £24k to £36k debts, the £36k figure is the total combined with my partners debts.LBM 16/03/2015:eek:
Starting debt £27926 :mad:
Current debt £25705
Aim to be debt free by 03/2021 :beer:0 -
Snowballing is paying only the minimum payments to the debts with the lowest interest rate and throwing everything you've got at the debt with the highest interest rate. Then when that's paid off, doing the same to the debt with the next highest interest rate, and so on.what is snowballing debt?
We hadnt thought of over paying, just paying out the monthly payment for the 10 years.
As has been said, last year you had £24k debt, and by taking out a secured loan you're going to be paying back double that.
You need to address the reason you're spending more than you're making first, or borrowing more is going to be a horrific decision - especially as it'd be secured."Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."0 -
No I haven't gone up from £24k to £36k debts, the £36k figure is the total combined with my partners debts.
OK I stand corrected.
But I do think that revisiting the DFW board is the way forward. This time do a full SOA listing absolutely everything and cut back massively. The guys on that forum are great and helped me a lot.DFW Nerd 0350 -
It looks great and if you stick to the repayments without borrowing ANYTHING until this loan finishes, then it could be a good thing.
But in my 20 year career with a bank the number of clients that didnt take out further borrowing after refinancing like you are suggesting was well under 1%.
Then you find that you are paying loans and interest for much of your working life, and possibly into retirement as many do these days.
I would suggest posting on the "debt free wannabe" board, and you will get some amazing advise in how to clear your debts, the best way to go about it, and other tips to cut down expenditure where possible.0 -
So whats happened since 2013 ?
Did you make a start cutting back ?
Post on the debt free board, a secured loan isnt what you need.0
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