MBNA card balance to Personal Loan

System

This discussion was created from comments split from: Unsure whether to consolidate - please advise.

jasminehope

hey everyone - hope you're all doing fine during this difficult time.

So I have an MBNA credit card with a balance of £4k @ 28% Annual APR.
I currently pay £200 a month to pay it off. I think at this rate I'm expecting to completely finish paying in about 24 months.

However, I have seen the Post Office Personal Loan, with a 90% chance of getting a 3.3% rate. I know that there's a chance that I may have to pay a higher rate of interest once it gets approved. My credit score is Good, got no payment defaults, and i keep up with all my payments.

Surely it would be better to consolidate the MBNA credit card debt with a personal loan so I pay less interest at the end of the day? (I would still pay off the personal loan within 24 months by overpaying each month)

What do you all think, because I really want your opinions as I'm not the best at calculating savings 

Thank you so much and stay safe y'alll!

[Deleted User]

It's certainly not a 'surely'.

It depends on the reasons for the debt, whether you can get borrowing at a lower rate, whether your income will support 8k of debt and whether you have your spending under control.

Have you run an eligibility checker?

Dobbibill

jasminehope said:

hey everyone - hope you're all doing fine during this difficult time.

So I have an MBNA credit card with a balance of £4k @ 28% Annual APR.
I currently pay £200 a month to pay it off. I think at this rate I'm expecting to completely finish paying in about 24 months.

However, I have seen the Post Office Personal Loan, with a 90% chance of getting a 3.3% rate. I know that there's a chance that I may have to pay a higher rate of interest once it gets approved. My credit score is Good, got no payment defaults, and i keep up with all my payments.

Surely it would be better to consolidate the MBNA credit card debt with a personal loan so I pay less interest at the end of the day? (I would still pay off the personal loan within 24 months by overpaying each month)

What do you all think, because I really want your opinions as I'm not the best at calculating savings 

Thank you so much and stay safe y'alll!

Hi jasminehope - welcome to the forum

The first thing you need to do is look at the reason you have £4k on a Credit Card - you want to make sure you can prevent it happening again in the future.

You don't say what the payments would be on the personal loan - are they more than £200 per month. How long would you be paying the loan and what would the payments be? Will this be shorter than 2yrs? Can you pay more than £200 per month?

The good side to having credit card debt vs a loan with a fixed payment is you can pay the minimum on a credit card if you struggle one month.

Have you looked at a BT card to shift the debt to 0%? (remember to factor in the fee in your calculations)

jasminehope

Deleted_User said:

It's certainly not a 'surely'.

It depends on the reasons for the debt, whether you can get borrowing at a lower rate, whether your income will support 8k of debt and whether you have your spending under control.

Have you run an eligibility checker?

Thank you for replying! Yeah I've run an eligibility checker. It says 9.5 out of 10

jasminehope

Dobbibill said:

jasminehope said:

hey everyone - hope you're all doing fine during this difficult time.

So I have an MBNA credit card with a balance of £4k @ 28% Annual APR.
I currently pay £200 a month to pay it off. I think at this rate I'm expecting to completely finish paying in about 24 months.

However, I have seen the Post Office Personal Loan, with a 90% chance of getting a 3.3% rate. I know that there's a chance that I may have to pay a higher rate of interest once it gets approved. My credit score is Good, got no payment defaults, and i keep up with all my payments.

Surely it would be better to consolidate the MBNA credit card debt with a personal loan so I pay less interest at the end of the day? (I would still pay off the personal loan within 24 months by overpaying each month)

What do you all think, because I really want your opinions as I'm not the best at calculating savings 

Thank you so much and stay safe y'alll!

Hi jasminehope - welcome to the forum

The first thing you need to do is look at the reason you have £4k on a Credit Card - you want to make sure you can prevent it happening again in the future.

You don't say what the payments would be on the personal loan - are they more than £200 per month. How long would you be paying the loan and what would the payments be? Will this be shorter than 2yrs? Can you pay more than £200 per month?

The good side to having credit card debt vs a loan with a fixed payment is you can pay the minimum on a credit card if you struggle one month.

Have you looked at a BT card to shift the debt to 0%? (remember to factor in the fee in your calculations)

Thank you for your reply!

So the calculator with the personal loan says a monthly repayment of £237.58 at 8.9 APR rep. for 18 months. In my current financial situation, my income has been stable and I'd be paying this comfortably. I can pay more than £200 per month. The thing is I don't like the idea of minimum payments because then you can easily prolong the time it takes to pay it off, with more interest adding up each month. 

I'll take on a balance transfer card thank you!

jasminehope

jasminehope said:

Deleted_User said:

It's certainly not a 'surely'.

It depends on the reasons for the debt, whether you can get borrowing at a lower rate, whether your income will support 8k of debt and whether you have your spending under control.

Have you run an eligibility checker?

Thank you for replying! Yeah I've run an eligibility checker. My income is about 30k a year.

I only pay for a mortgage and household bills except for this which are under control

zippygeorgeandben

Would you mind starting your own thread please and not piggybacking on this one?
Many thanks

Dobbibill

I have split the thread so this is a new topic and not piggybacking on your Consolidate thread Zippy.

thanks

jonesMUFCforever

IMO You will not get the low P O Rate on a £4k loan - maybe £7500 or more yes but not £4k.

Fighter1986

See above where the OP was quoted 8.9% APR for the Post Office loan.

OP - is there any reason why you've not considered a 0% balance transfer credit card? What do the eligibility checkers say about this option?