Help Needed

darlo1883

i have a loan which i pay £258 per month a real drain on my finances. I'm looking to borrow more /remortgage to get the 10k i need to pay off loan and reduce my monthly outgoings by about £200 a month. Good idea?? Tried a few months ago and my current lender refused my application due to my wife having used a pay day lender once and paid straight off. should i try again or go elsewhere

Caz3121

you would be turning unsecured borrowing into secured.....rarely a good idea
how much more would you be paying back over time? "£258 x ? months" v's "£58? x ? months"
Probably best to look over at the debt free boards for help with your current budget

Sarastro

No - bad idea. Really bad idea. Keep the debt unsecured.

You might lower your monthly outgoings, but the total amount you will pay back in interest over the life of the mortgage will frighten you half to death. Do your sums.

System

£10,000 over 36 months at a decent 3.3% rate, repay £10,509.
£10,000 over 36 months at a quite high 9.9%, repay £11,528.
£10,000 put on a mortgage at 3% over 20 years, repay £13,261.

sourcrates

darlo1883 wrote: »

i have a loan which i pay £258 per month a real drain on my finances. I'm looking to borrow more /remortgage to get the 10k i need to pay off loan and reduce my monthly outgoings by about £200 a month. Good idea?? Tried a few months ago and my current lender refused my application due to my wife having used a pay day lender once and paid straight off. should i try again or go elsewhere

Oh where do you start with a question like this.

Consolidation seems such an attractive option, just add it to the mortgage, and forget about it, trouble is, when you've done it once, you tend to find an excuse to do it again, another loan, or credit card, and so on.

Then comes the reality of what you've done, and you find yourself on the brink of potential bankruptcy.

It really is not a good idea for so many reasons.

Dobbibill

darlo1883 wrote: »

i have a loan which i pay £258 per month a real drain on my finances. I'm looking to borrow more /remortgage to get the 10k i need to pay off loan and reduce my monthly outgoings by about £200 a month. Good idea??

No - this is not a good idea.

How long have you had the loan?
How much was it when it started?
What has changed since you could afford the loan (at the start) to now (when it's a drain on your finances)?

DCFC79

Look at your spending and cut back and stick to the plan.

poppasmurf_bewdley

No matter how many times it's tried, and no matter how it is covered up, disguised, or covered with snow during Christmas, borrowing extra money is no way to lower debt.

If you cannot manage at the moment, they you need to lower your spending and outgoings to match your income. Do an SOA, get it up on here, and we will endeavour to help.

patman99

The only time re-financing works is when you can get a loan for the final settlement of the existing loan, for the same remaining time period and at a lower rate of interest.

I managed this with car finance a few years back. Best Apr from bank was 16%, so went with a 12% over 5 year deal with a car finance company.

3 months later, bank offers a loan of same size, but over 3 years at 7%. I took the loan, paid off the finance on the car and saved several £s in the process.

Much harder to achieve the same these days though.

[Deleted User]

sourcrates wrote: »

trouble is, when you've done it once, you tend to find an excuse to do it again, another loan, or credit card, and so on.

I can vouch for that, from bitter personal experience.

Also, refinancing invariably "resets the clock", nullifying all the payments you've already made, and putting you right back at the time frame you started with, or possibly even longer.

jonesMUFCforever

The new mortgage rules will prevent the OP doing what they want to do - the best they can hope for is a mortgage for the length of existing debt ie if a personal loan over 5 years is put on the mortgage then that portion must be repaid within 5 years.
Not worth it IMO.