Advice on paying off loan using a credit card or other methods?

Allensham

Hi All,

Would just like to first off say I'm very new to the financial world of borrowing and the lenders terms are getting me all confused so would appreciate any responses keep the banking terminology to a minimum to avoid said confusion Secondly, thanks for anyone that takes their time to make any suggestions.

My predicament;
- I currently have a balance of around £2200 outstanding on an existing loan.
- My personal circumstances have changed and I need to move closer to to my family to help care for my mother and be closer to family. This means I need an injection of cash. Around £2000-£2500.
- I can't afford to have two loans running at the same time so my thinking is I'd borrow an amount to pay off my existing loan and have enough left over to assist with my move. So in total look for around £4500 lets say.

I've searched and read more articles and forums than I care to mention and I've found it all very overwhelming. Is there anyone that could advise the best/cheapest way to proceed to get the funds I need?

Thanks!

jonesMUFCforever

Are you working?
What income do you have what expenditure?
What do your credit files say about you?

Allensham

I Work full time and after paying various bills including the current loan that's outstanding (I pays £158 a month) I have roughly about £200 a month spare to as i please with.

I would of usually save up for this however its the sudden change of circumstances that's made me need the money now.

I'm not sure what you're referring to by credit files? However if it helps my currently Noddle report shows a score of 2/5

jonesMUFCforever

2/5 on Noddle is a bad score which indicates past problems such as late/missed payments or even ccj??
You will struggle to get a loan or credit card.
If you have £200 per month why not over pay the loan to repay sooner?

Allensham

I've never personally missed any payments on anything for the last, at least 4 years. I once had BT telephone and broadband for my sister and she didn't make the payments which went into arrears but that was cleared like 3-5 years ago which is probably the reason for the bad credit rating.

And the £200 a month spare I have goes on other things for example at the moment I'm learning to drive.

I'm aware of the things I can do in the long run to reduce payments etc, what I need is; if you'd be so kind is to explain or advise on how I can, or what is the best way around my current predicament of needing cash fast to cover costs of moving and paying off my existing loan.

I've looked at credit cards etc but I'm not 100% how they work and if they'd help my situation.

For example, could I get a credit card with either 0%APR or low APR which beats my current loan APR of around 25% and pay off my current loan using the card and then transfer more funds into my account (Effectively use it as a consolidation of existing loan) to use as I need it?

And again, not sure how credit cards work as I've never had one. Do you use the credit on there, and then have an agreed date to pay it back by? Like a loan, could I example use the credit, then pay it off over the next 2 years?

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andyfromotley

Hi allensham,

from what you say i doubt that you are going to get any 0% cards or loans at a decent rate. You can check on the eligibility checker on the main site. Paying off loans with a CC and keeping it on 0% is complicated. You probably need a 0% purchase card.

Can i ask why you need £2.5k extra to move? That seems an awful lot of money.

I think you will just have to find a cheaper way to do it. Do not borrow more money at high rates (like the 25% rate you already have) its a sure road to disaster.

Allensham

Hi Andy,

If it's difficult to get 0% and keep at that with my current score, is it more likely I'd get a cheaper credit card deal than what I would another loan?

I've already been accepted at my bank for the funds I requested by consolidating my loan with an APR of around 17%. However this was 2 weeks ago and I checked again today to which I was offered %25 (I assume the checks they did 2 weeks ago lowered my rating).

The money is go towards initial months rent and bond on a new house along with admin fees (which amounts to around £1300. Then money towards furnishings and groceries until I can get back on my own feet again.

At a minimum i suppose i could get by with £1500 loan but my understanding was the APR with my current loan provider dropped if i had at £2500 so i figured it was a good amount to play with.

Ultimately I do need to borrow money. There is no way around this and I have £0 savings (due to being naive and not foreseeing that anything at all could go wrong in the world...I'm young and new to the real world!)The sudden change will inevitably happen this month so I need to get a new place.

The repayments, whatever they may be, I'll be able to afford. My job is pretty secure and I'm confident I can get another job fairly quickly should I for whatever reason need to. I just want to do this in the cheapest and most responsible manner I can.

Btw, thanks for the responses so far guys!

jonesMUFCforever

Won't you get back bond money from present property?

andyfromotley

whoa!! you haven't got a job to go to??

Don't borrow any more money. How on earth are you going to pay your existing commitments? This is not a responsible plan. You need to rethink it. Can you move in with family or a friend? Can you rent a room somewhere. Can you postpone the move and save some money.

Borrowing more when you future is so uncertain is not a wise thing to do. You are planning for how you would like things to be if you had a secure job and savings. You are not in this position and you need to rethink this plan to one thats more appropriate for your circumstances. I'm not having a go at you just trying to inject some realism and save you from a course of action that could go very badly wrong for you.

Given your circumstances i doubt if you would get a loan if you were truthful in your application. They normally ask if you know of anything likely to affect your circumstances, obviously you do, and other than really sub prime lenders no one will lend to you.

It may well only be temporary. Move in with friends of family, get a jib, get your current bond back and you are up and running. No extra loan involved.

Allensham

Sorry you seem to of misunderstood, I'm currently in full time employment. I have been since I left college 5 years ago.

And also I probably will get the bond back however I won't get that until after I've moved out and they've processed it which I would of already had to of paid it for the new house before that.