High APR loan for debt consolidation...

b81292

I am wanting to take out a loan to consolidate my debt from my Very account (£1500), Aqua card (£1500) and my other store card (£500) however I have a poor credit score of 360 as my file has been marked as I was late with a Barclaycard payment and then paid the card off in full two days after. I can only get high interest loans with the best being 39.9% apr with a guarantor. Do you think it would be worth my while to take this out? I worked out repayments are £134 per month but when I work out individual repayments to separate lenders that adds up to roughly £200 and not going to go lower. Any advice ? Thank you

[Deleted User]

No.

Your debts are not that high. Don't drag a guarantor into this either.

What are your current rates on your existing debts?

HappyMJ

b81292 wrote: »

I am wanting to take out a loan to consolidate my debt from my Very account (£1500), Aqua card (£1500) and my other store card (£500) however I have a poor credit score of 360 as my file has been marked as I was late with a Barclaycard payment and then paid the card off in full two days after. I can only get high interest loans with the best being 39.9% apr with a guarantor. Do you think it would be worth my while to take this out? I worked out repayments are £134 per month but when I work out individual repayments to separate lenders that adds up to roughly £200 and not going to go lower. Any advice ? Thank you

If your debt is the sum of all those figures it's £3,500 which isn't a large amount for someone even on benefits. If you can't afford the minimum payments on those loans you seriously consider a DMP which will reduce your repayments. If you have no assets, no job and no prospect of earning more over the next 12 months a DRO might be an option which will write everything off.

Pixie5740

No I don't think you should get a consolidation loan.

Based on your figures....

Loan Principal: £3,500
APR: 39.9%
Monthly Repayments: £134

That looks like a term of 5 years to me. If you took out this loan you would end up repaying over £8,000. :eek:

Throw a guarantor into the mix and should you not be able to keep up the loan repayments then your guarantor will be landed with an £8k loan.

Debt consolidation rarely works anyway. To get out of debt you need to address why you are overspending not borrow more money.

Put together a statement of affairs see what you can cut back on. If you're stuck post it on the Debt Free Wannabe board for suggestions. If you really cannot make the minimum repayments you currently have then contact one of the debt charities (CAP UK or Step Change) for advice.

b81292

Thanks for your advice

I pay currently to Very about £97 which keeps rising. £60 for Aqua card and £40 to store cards . I thought a loan might cut payments slightly and consolidate then all together because my Very account keeps rising every month. I can afford to pay them (at the moment , I'm going on maternity leave in a few weeks) but thought it may be better to pay them all off and have one outstanding sum.

The loan I found has quoted a total repayment of £6451 over 3.5 years (£3500 borrowed)

[Deleted User]

Are you still using the Very account? I can't see why the minimum payment would keep increasing unless you're adding to the balance.

What are the repayment terms of the Very account?

And what are the rates on all the accounts?

tomtontom

You need to get a grip of this before baby is born - you were in debt last year but appear to have taken out more credit since. Post a fresh SoA on the Debtfree Wannabe board and start working to a budget - and stop buying from catalogues!

b81292

Well that's why I thought a loan would sort it once and for all. Catalogues have always been a problem but payments have been increasing , I haven't bought from them but the interest is creeping up. I've had a few BNPL finish so that's why I think it happened.

I have sorted my debt from last year and well aware what's happened . I can afford to pay them back and not worried at all about missing payments or anything happening - I thought it might be easier just to have it all in one loan and pay a set amount a month

They're all about 39.9%, roughly the same as this loan.

MallyGirl

if they are all about the same then there is nothing to be gained by taking a loan. Just keep slogging away throwing everything you have at the debts in highest APR order. You need to be more specific on APRs for each debt so you are applying the money in the right way - 'about 39.9%' suggests you don't actually know.

b81292

Very - 39.9% Apr and payments range every month again I believe this is to do with BNPL as they were around £60 and this month was £97
Aqua - 35.9% payments were £60
Next - 24.99% £40 a month

Are the actual APR rates that I pay . The loan is 39.9%

[Deleted User]

Ok. You'd be mad to deliberately consolidate to a higher rate loan. Unless you have a lot of spare cash you need to get rid of, in which ase you can throw it my way. I'll send you my bank details.

What you need to do is pay the minimum plus £1 on aqua and Next, and throw as much as you can at the Very account.