Remaining Loan & Mortgage Q

[Deleted User]

Just reading another thread and it got me thinking.


I currently have a loan balance of £4500 that I pay £173 p/m. I'm trying to save to get it down and get it paid off as I need a re-mortgage in September as a sole applicant, either in the current house or moving.


I've managed to save £1k towards it but I wont get it paid off by July anyway so I was thinking of getting another loan of £3500 (after using the £1k to pay off the loan) over a longer period. Say 4 years for £80 a month. Then save the extra £100 and the extra I was saving to pay off the original loan towards a bigger deposit.


Which would be the best option? If I carry on as I am, the loan balance will be £3500 in September and I may have saved £2000 so loan remaining £1500 (which I could move to a credit card, currently Zero balance). Decent equity in house. Just don't know if banks prefer higher deposit or less monthly commitments.


Hope that makes sense!

lovehackney

If you take out another loan for a longer period of time, are you sure you won't pay back more overall (because of interest)? You will almost certainly be paying back £80 p.m for longer than 4 years!

Why don't you play around with some of the online calculators for affordability and see how different levels of monthly commitment change what they will offer you.

You could also look into getting a money transfer credit card, like a balance transfer except they transfer the money to your bank account. You could then use this to pay off the loan.