Is a loan a good idea?

nat_hughes1988

Hi 
Just wanting advice. I have credit cards to pay off (all 0% interest) that come too £2000. This has to be paid by October or interest starts being added. I manage to pay them off every month but I pay about £210 which leaves me with no money spare. I’ve been shopping around and can get a £2000 loan and pay £94 a month for 2 years is this worth doing.? I know in the long run I would pay interest on the loan but it’s such a big drop from paying £210. Would it be a good idea.?

DrEskimo

Have you tried to apply for a balance transfer with 0% fees and another interest free period?

Keep paying it down as much as you can and get it cleared either way. You don't want to be spending 2yrs paying off a relatively small loan. Soon enough it'll be gone and you will have the entire £210 as additional spare income to go towards your monthly budgeting. 

[Deleted User]

It depends on the relative rates. It's usually best to get debts paid off - your future self will thank you. 

You certainly wouldn't want to switch a 0% debt to interest bearing.

ThePants999

October is a long time away - you certainly wouldn't want to act now!

tacpot12

If you take out this loan, are you going to apply for more credit cards? If so, I would say that the loan is a very bad idea. If you are not going to apply for more credit cards, then the loan is probably a good thing. 

You need to save some of the difference between £210pcm and £94pcm for emergencies. Making this change so you have more money to spend is pointless if you spent it on non-essentials. I suggest you start by saving £100pcm and see how you get on. 

DCFC79

nat_hughes1988 said:

Hi 
Just wanting advice. I have credit cards to pay off (all 0% interest) that come too £2000. This has to be paid by October or interest starts being added. I manage to pay them off every month but I pay about £210 which leaves me with no money spare. I’ve been shopping around and can get a £2000 loan and pay £94 a month for 2 years is this worth doing.? I know in the long run I would pay interest on the loan but it’s such a big drop from paying £210. Would it be a good idea.?

Maybe you should look at your spending and cut back.

vic_msn

Taking a loan is not a good idea in your case, considering you are not paying any interest.
I would reconsider your position at end of August or early September. 
During these months, check if you can save elsewhere switching broadband, energy etc?

lopsyfa

Don't apply for the loan now. Keep paying the £94 (that should cover the minimum payment easily) and by October the credit card balance will be about £1436. Your credit history should be better than it is now by virtue of more payment history and lower balance which should allow you to shift the balance to another % card. 

Worst case, you can get a loan at this point but you need to be very discipline to close the card down and maybe look at making over-payments on the loan.

The best option is to post an SOA (https://www.lemonfool.co.uk/financecalculators/soa.php) now and look at free up more money now to throw at the credit card and pay it off before the 0% runs out. Then in October, you will have the £210 spare to do as you wish.

On_my_way

Don't borrow money - you need to get a serious budget planned and work hard to pay it off.

You Tube -Dave Ramsey- hard hitting but his system really works.

Fentopin

Loan is never a good idea. I have some friends who got loans and couldn't pay for it. Maybe it a better way not to do this.

foxy-stoat

I would rather pay £210 for 10 months than £94 for 24 months.

You have no spare money as you have already spent the £2000 - now I am afraid you need to pay it back.