Can I get a Debt Consolidation loan to pay off an existing Guarantor Loan

CJREED1989

Hi Everyone

I stupidly applied and succeeded in getting a £10K guarantor loan with Amigo to buy a van. I believed I was getting a loan with fixed interest and that it would be paid off after 5 years.

I pay £395 a month and it’s not touching the loan and I’ve had it for 2.5 years.

Is it possible to get a debt consolidation loan
1. When you have a guarantor loan
2. To eat up the guarantor loan and make my monthly payments cheaper.

I looked into a loan with NatWest and I could potentially be paying £230 a month rather than £395.

Any help would be much appreciated :money:

[Deleted User]

It depends on your circumstances, but almost certainly not. With a poor credit history and an existing large debt, you're likely to fail on both risk and affordability.

However, your loan only has a 2.5 years to go. If you overpay it will come down even faster. Visit the DFW boards for advice on cutting costs and paying back faster.

fatbelly

It's going to be more difficult to get a second loan when you've already got one. Unless your circumstances have improved hugely since your credit history forced you down the guarantor loan route, I'd say you won't get an offer.

But you can get some idea of the likelihood without leaving a mark on your file by using a soft search checker like here

For comparison, what you've signed up to is £10,000 over 60 months, repaying £395.25 per month, total repayable £23,715.00. Interest rate 49.9% (variable).

Xbigman

With that borrowing and payment it looks like an APR of 49.9%. In which case it would be cleared after 5 years. With 2.5 years to go and a poor credit rating you might well be better off keeping going and not going into debt like this again. This is a harsh lesson, learn from it.



Darren

Gaz83

If your credit history was poor enough to mean you needed a guarantor loan in the first place, no mainstream lender is going to touch you with a bargepole for a consolidation loan.

Gaz83

CJREED1989 wrote: »

Hi Everyone

I stupidly applied and succeeded in getting a £10K guarantor loan with Amigo to buy a van. I believed I was getting a loan with fixed interest and that it would be paid off after 5 years.

I pay £395 a month and it’s not touching the loan and I’ve had it for 2.5 years.

This bit doesn't make sense, though. Are you saying you signed up for a five year loan, and that's not what you're getting? Have you missed any payments? Has the interest rate been changing? What does your paperwork show?

foxy-stoat

Doesnt make sense - £10,000 * 49.9% / 12 = £415.83 interest on month 1 - your monthly payment isn't high enough to cover the interest each month.

I cannot believe that its taken you 2.5 years to work out that the 49.9% loan you signed up to is a horrible rate.

You wont get a loan from anyone to clear this at the headline 2.5% rates that you see on the websites of lenders, your only hope is to over pay the loan as much as you can - sell stuff, sell the van and buy one for a couple of thousand and start again when your credit is better.

Pixie5740

Amigo's representative APR is 49.9%. If you were offered the representative rate for a £10k loan taken over 5 years then I would expect your payments to be £456 a month not £395 so something doesn't seem right.

Is there a reason you resorted to Amigo in the first place 2.5 years ago rather than another lender with more favourable rates? If Amigo were the only lender that would give you a loan have your circumstances significantly improved since then?

Mobeer

Do you know how much you need to repay the whole loan? You mention "it's not touching the loan" - what does that mean in terms of numbers?

Have you talked about this with your guarantor? Perhaps your guarantor could borrow the money needed to settle this loan? That would leave them liable for repaying the new loan, but then maybe you could pay them their monthly payments? This depends a lot on trust.

Xbigman

According to the money.co.uk loan calculator a £10,000 loan at 49.9% apr will cost £395.32 per month for 5 years. So this certainly looks like a 5 year conventional loan to me.


Darren

System

We had a loan years ago where the interest was paid off first then the loan amount started to reduce , you are half way there to redo a loan and start again would be a false economy .