Consolidation Loan

Sinev89

Hi guys, just looking for some advice. I took out a Personal Career Development Loan (PCDL) about 3 years ago and have been paying off ever since. I've not missed any payments, but because it has such a high interest rate I've just taken out a loan with a lower rate.

According to some problem with the bank, they've waived any interest for the loan - therefore the figure to settle the loan is the outstanding balance - meaning I just have to keep on making the payments and once it's essentially at £0 then it can just be closed.

So, having just taken out an additional loan to cover this, I'll be able to save £50 a month paying off this new loan, whilst I can get the current PCDL cleared.

My question is, for my credit rating, would it be best to just keep the lump sum from new loan to cover the existing one until it expires on it's final date - or should I close it now? In the latter situation I'd be paying off for 2 loans technically rather than one and there would be no missed payments. Is that better to do or should I just have one active loan?

Thanks! I hope I've explained myself clearly!

Arleen

Do not spend money for credit rating. it's an imaginay number, and yours for today is 699. Check again with me when weather changes as I will generate another random one for you.

What matter is what is on your history, and what do you need the history for. Best way to build is to get a card, use it every month, and pay it off in full every month. This way it shows that you can manage money, but doesn't cost you interest like a loan will.
So do what will save you most money, and stop worrying about imaginary numbers.

forgotmyname

The above 699 is the old system, my new and modern system scores in biscuits.

Your new credit score is 2 digestives.

How much interest are you earning in this money?

Pixie5740

To be clear, your CDL has had all the interested reimbursed due to some clerical error effectively making the loan 0%. This new loan has, I assume, an interest rate greater than 0%. So to me it would sense not to take the new, more expensive loan or if you have already taken it to repay it asap instead of hanging on to the money in an account somewhere that's probably not earning more interest than the loan is costing you.

As for your credit score forget about it. As others have said no lender can see it never mind use it. It's your credit history lenders are interested in ie when you borrow money do you repay it on time. A much cheaper way of doing that than having another loan would be to get a credit card, use it for every day purchases like food and petrol and then repay the bill in full each month which will cost you nothing in interest.

Sinev89

Hi everyone,

Thanks for the replies - they are greatly appreciated. I think there is some confusion possibly. If I provide some numbers it may clear it up:

I'm paying £210.00 every month until Feb 2020 to complete the existing PCDL loan.
In order to save £50 every month, I've taken out another loan with a better rate just now where I'll be paying about £160 instead - and the money from this loan can be used to close the PCDL loan and remove it completely. - This loan will be completed un Feb 2020 also.

Everyone's been saying that making repayments on time is good for the credit score.

Just to clarify: Should I request to close the PCDL now, or, should I leave the loan money in that account until it is finished by Feb 2017 where each and every payment will go through with nothing unpaid.

Either way, paying off this other loan for £50 less with the same term works in my favour.

Should I close the first loan or leave it active and continuous?

Thanks :beer:

Caz3121

Sinev89 wrote: »

I'm paying £210.00 every month until Feb 2020 to complete the existing PCDL loan.
In order to save £50 every month, I've taken out another loan with a better rate just now where I'll be paying about £160 instead - and the money from this loan can be used to close the PCDL loan and remove it completely. - This loan will be completed un Feb 2020 also.

I am not sure how making payments £160 per month will clear the loan
For calculations sake - if you have 36 months left of the PCDL you will pay £7560. As this is at 0% then £7560 is also the total amount due if you were to pay it off early
How much is the loan for that is £160 for 36 months?...it will be for less than £5,700 so does not clear the loan....are you sure the term is not longer?

Sinev89

No no,

It was an existing loan which I'm over half way through.

Sinev89

Same term length

Pixie5740

Which loan has had the interest waived?

Sinev89

The PCDL at £210.09

glentoran99

how can you get a better rate than 0?