Paying one loan with another loan

Loveactually

Hi all,

I have currently a Barclays loan of £10000 with 30 months remaining.

My current monthly repayment is £389

If I take a new sainsbury loan for same amount for same period
My monthly repayment will be £343 saving me £46 every month.

Is this a good plan or am I just creating more credit searches on my files unnecessarily ?

Thanks all for reading

[Deleted User]

It's a good plan if you can actually get a loan at a lower rate.

However, two lots of £10k is a big ask.

zippygeorgeandben

I'm confused - what are you going to do with the original 10K? transfer if to the sainbury's with a balance transfer?
If this is consolidation, I'd go against it. I'm not sure how long the first loan was for but you've already paid some of it off.

YorkshireBoy

zippygeorgeandben wrote: »

I'm confused - what are you going to do with the original 10K? transfer if to the sainbury's with a balance transfer?

Sainsbury's credit the OP's current account, and from there they settle the original loan.

If this is consolidation, I'd go against it.

It's refinancing, and unlike consolidating credit cards the original debt can't be run up again.

I'm not sure how long the first loan was for but you've already paid some of it off.

Doesn't matter how long it was for. The new loan will be taken over the same period as that outstanding on the original. The saving is large...nearly £1,400 over the next 2.5 years. However, as zx81 says above, another £10K at 2.8% (or 2.9% without a Nectar card?) would be a tall order for someone already (at least) £10K in debt.

zippygeorgeandben

Thanks for clarifying for the OP YorkshireBoy