Refinancing loan advice

david_cox1990

Hi All,

I'm currently weighing up the options as to whether it's worth taking out a new loan to refinance my debts.

Current Situation
Bank Loan £1600 outstanding
Overdraft £2250

As I'm currently stuck in my overdraft, this is costing me £35 per month. My loan repayments are £225.18 per month and run until April 2016.

Having looked online, it seems I would be able to get a loan from the likes of Tesco over an 18 month period at a rate of 12.3%.

If I were to take another loan of £3850 to clear my current loan and overdraft, I'd pay back £234.16 per month over an 18 month period.

Thoughts please? Is it worth doing?

Any advise is much appreciated.

[Deleted User]

What's the rate on your existing loan? And how quickly would you be able to pay down your overdraft.

lee111s

Personally, with such a small amount of debt I wouldn't bother refinancing.


Do you have any spare money left that you can use to overpay the loan or simply spend less each months to gradually reduce your O/D?


I suggest you pop over to the debt free board, post up a Statement of Affairs and you'll get some advice on how to spend less/pay off your debts quicker.


Very rarely is it a good idea to refinance because when most people do, they then simply rack up the original debt again.

molerat

On the face of it yes. The problem could be getting another loan. Why are you consistently in the OD to that level and not paying it down is the question that the lender is likely to ask before giving you access to more debt. Is the OD and loan with the same bank ?