Loans options HELP

[Deleted User]

konn1ch1ha wrote: »

Alternative options to take, input etc...

Cut costs
Pay down debt
Earn more

A 28% loan looks like you're just digging a deeper hole.

dieselv2

konn1ch1ha wrote: »

Whether I should get it or not is a different matter, but I have actually been approved for it. This is why I've come here.

Approved by eligibility checker or real application.

If real application it'll be on your credit file and you've not earned yourself some debt. I'm assuming there's a cooling off period to cancel and it's what your debating?

konn1ch1ha

Deleted_User wrote: »

The loan rate sounds more expensive than your overdraft.

Would the car insurance not be cheaper paid on a monthly basis?

The loan would also contribute towards paying off the insurance in one to bring monthly outgoings down.

My car insurance in £x per month, paying off in one go would £0 per month, loan monthly repayment (much) < current £x insurance instalments. That's why the loan is tempting.

konn1ch1ha

dieselv2 wrote: »

Approved by eligibility checker or real application.

If real application it'll be on your credit file and you've not earned yourself some debt. I'm assuming there's a cooling off period to cancel and it's what your debating?

Earned myself some debt? There is a 14 day cooling off period. I haven't confirmed the loan yet, it's available for 30 days.

And it's a real application through online banking.

enthusiasticsaver

My advice would be do not take out more borrowing. It never works. You have a problem in that your earnings are too low. More debt will compound that problem even if it ends up moving from overdraft to a loan and 28% interest is awful. This presumably reflects your poor credit rating. If you have a £100 deficit then this could easily be made up by getting part time work which to your credit you say you are looking for. I would suggest you put all your efforts into that and gradually reduce the overdraft like you would a credit card or loan. Can you sell anything or reduce costs anywhere else? How much income does your flat bring in rental income and is it worth selling this in the long term?

bearcat16

It is very unlikely that paying monthly for car insurance will cost 28%. Therefore, using this expensive loan to pay for it instead of the insurers own (probably about 9%) finance will not save you money, it will cost you more.

You need to earn more/spend less. And pay down your existing debts steadily.

More borrowing, especially at the insane rate of 28%, will make your situation worse.

konn1ch1ha

enthusiasticsaver wrote: »

My advice would be do not take out more borrowing. It never works. You have a problem in that your earnings are too low. More debt will compound that problem even if it ends up moving from overdraft to a loan and 28% interest is awful. This presumably reflects your poor credit rating. If you have a £100 deficit then this could easily be made up by getting part time work which to your credit you say you are looking for. I would suggest you put all your efforts into that and gradually reduce the overdraft like you would a credit card or loan. Can you sell anything or reduce costs anywhere else? How much income does your flat bring in rental income and is it worth selling this in the long term?

Thanks for the advice. I've started cutting silly subscriptions like Netflix etc. I'm going to budget myself on food shopping. EDF bills aren't helpful at £28pcm. I've pretty much sold a lot of things I don't use anymore. Running out of places to turn really.

konn1ch1ha

bearcat16 wrote: »

It is very unlikely that paying monthly for car insurance will cost 28%. Therefore, using this expensive loan to pay for it instead of the insurers own (probably about 9%) finance will not save you money, it will cost you more.

You need to earn more/spend less. And pay down your existing debts steadily.

More borrowing, especially at the insane rate of 28%, will make your situation worse.

The point of the loan would be to pay off the car insurance in full so I would have less outgoings per month. The loan repayment would be less of a monthly outgoing than that of the car insurance.

konn1ch1ha

bearcat16 wrote: »

It is very unlikely that paying monthly for car insurance will cost 28%. Therefore, using this expensive loan to pay for it instead of the insurers own (probably about 9%) finance will not save you money, it will cost you more.

You need to earn more/spend less. And pay down your existing debts steadily.

More borrowing, especially at the insane rate of 28%, will make your situation worse.

But yes, you're right in taking out the loan is probably not the best idea - I just don't know which way to turn in this situation.

Caz3121

konn1ch1ha wrote: »

I have applied between £1-2k with monthly repayments being around £40-50. Interest is around 28%.

how many years is this loan for?
you state that it would be cheaper than paying your car insurance monthly, but what happens next year when you are still making payments for this years loan which paid for the insurance but you need to buy the next years?