Loan to clear credit card.

Jono123

Hi All,

I have about 4K on a Barclays credit card, which has a limit on it of 13000. I am currently paying this back on the minimum with occasional bulk payments (which I know isn't sensible)

I'm looking to get a loan for 10k which will allow me to clear the above and also put 6k towards a new vehicle.

Before applying for the loan, should I reduce the credit card limit, or is it seen as a good thing that the card isn't maxed out?

Any help would be great.

YorkshireBoy

Your post raises more questions...

Why pay interest on the £4K?

Why wouldn't you want to balance transfer the debt to another card for 0% (several years is possible), and then try for a £6K loan?

If you're only making minimum payments on the current card debt, where's the money going to come from to service the repayments on a £10K loan?

Jono123

Thanks for your reply.

Transferring a balance and a smaller loan makes a lot of sense.
Does a balance transfer show as a credit check and how detrimental would that that be detrimental to the application of a loan?

I am just getting hold of my finances as I've put it off for way to long which is why the credit card has not been paid off.

Jono123

Also would the monthly payment be larger for a 6k loan and a new 0 rate credit card rather than consolidating and paying a single loan??

YorkshireBoy

Jono123 wrote: »

Does a balance transfer show as a credit check and how detrimental would that that be detrimental to the application of a loan?

The application for the BT card will register a search, which will impact on the loan application. By how much is anyone's guess.

I am just getting hold of my finances as I've put it off for way to long which is why the credit card has not been paid off.

I think you may be kidding yourself. What I'm seeing is an attempt to more than double your debt, when it would appear you're not able to adequately service your existing debt. Not a problem if you've just had a large pay rise, or tightened your belt by, say, £100 a month, but if everything else remains the same it is a problem, or soon will be.

Also would the monthly payment be larger for a 6k loan and a new 0 rate credit card rather than consolidating and paying a single loan??

That's for you to find out, since we don't know over what period you'll be running with either of them. It may be possible that the loan could be lower if the duration was extended. You need to take a long hard look at where you want to be in 2-3 years, as consolidation - especially including an additional £6K spend - is rarely, if ever, a good move.

Jono123

Thank you again.

I have recently had a change in my monthly financial circumstances which will allow me to get on top of these things.

I've just used the site and your advise and have just been approved for a 40mnth BT 0% card which will allow me to at least be making payments above the minimum that actually pay of the card and not the interest.

I will wait for that to come through and see what the process does to my credit score and look into cars and the best way to secure a newer one.

Thanks for your help.

dresdendave

deannahupp369 wrote: »

The cheapest credit cards can considerably be condescending the cheapest loan rates for certain amount, and allow totally supple repayments. But you need to get smart, and make that artificial curve to your will. Small loans be inclined to be fairly costly. So, in its place of attainment a loan, influence a credit card to do it at a part of the cost. This is a full guide to turn-off artificial into a loan, hire you have a loan of much more inexpensively and overpay or underpay without punishment. Saver is for people aged 18 or over who meet one of the following two criterion.

Wow, I was under the obviously mistaken impression that they spoke English in our North American colonies.