Loan to get rid of credit card debt?

wasabi_project

I have recently been considering the option of taking out a loan of roughly £12k in order to pay off credit cards, but I am confused as to which would have the more negative impact on my credit score. I regularly make the payments on the credit cards but with my mortgage deal ending next year I was wondering if a loan would be beneficial or if I should just carry on paying the cards off. I pay just over the minimum payments each month on each card.

MorningcoffeeIV

Your credit score isn't a thing, so it doesn't matter.

Your aim is to get the debts cleared as quickly and cheaply as possible. If you're paying just over minimums, then you're unlikely to get any further borrowing, so get your head down and pay it off the old fashioned way.

The DFW boards will help.

DullGreyGuy

Why are you more interested in a fictional number peddled by credit reference agencies than the amount of interest you are paying?

Nebulous2

Are you paying interest on your credit cards? 

If they are on 0% deals it would not make sense to move to an interest paying loan. 

Ryan_Holden

DullGreyGuy said:

Why are you more interested in a fictional number peddled by credit reference agencies than the amount of interest you are paying?

Because they might not know it doesn't matter that much. 

OP, are you only paying the minimum because that's all you can afford to pay? Or could you pay more off one at a time?

wasabi_project

I genuinely thought that the credit score would have a big impact when my mortgage deal ends. Obviously i want to pay as little interest as I can, guess I just got too hung up over how my credit score looks as it's something I am constantly seeing things about how to improve it 🤦‍♂️

wasabi_project

Ryan_Holden said:

DullGreyGuy said:

Why are you more interested in a fictional number peddled by credit reference agencies than the amount of interest you are paying?

Because they might not know it doesn't matter that much. 

OP, are you only paying the minimum because that's all you can afford to pay? Or could you pay more off one at a time?

That is 100% right, i didn't realise that the credit score doesn't really matter.

We could probably afford to pay off a little more each month, going to be looking over finances over the weekend to get a realistic picture in our minds about it going forward. 

wasabi_project

Nebulous2 said:

Are you paying interest on your credit cards? 

If they are on 0% deals it would not make sense to move to an interest paying loan. 

Just started paying interest as 0% periods have come to an end on balance transfers that I made a while back

Ryan_Holden

You're going to get a load of people say that solving borrowing with more borrowing doesn't work.

And it's true for some and not true for others.

The best way out is to pay the cards down, find the most expensive and pay that off the fastest, maintain the others on the minimum in the meantime.

But that's not always practical. So a loan could do it, but you have to remember that it's your behaviours and choices that racked up the debt. Some folk worry that people see a loan as a way out and then will go right back to spending beyond their means. Which does happen.

Crux of it is, if you can genuinely, honestly make a dent in the cards rapidly with overpaying, that would be my way forward. Not sure how a loan would affect your mortgage chance though. 

fatbelly

You need to look at 0% balance transfers

https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/

Alex9384

Can you do any more balance transfers? You can find low fee or even zero fee BT cards. Have you tried eligibility checkers? Preferably on lenders' own websites (more accurate) rather than comparison websites.

Btw, the credit score that credit ref. agencies show you in the UK (unlike US) is not see by lenders, therefore it doesn't matter. Lenders have their own internal scoring systems that differ from lender to lender and you have no access to that score. That's why you can get declined by one lender and at the same time approved by another even if you give them identical info about income, etc. They all have their own criteria and look for different kind of customers. For example, I can get almost any high street credit card but when I do eligibility checks for "bad credit" cards (just out of curiosity), I'm not eligible. Not because my "score" is not good enough but simply because I'm not their target customer. Btw, the BS score shown by credit ref. agencies sometimes goes up and down for no obvious reason. Don't take this score any more seriously than your horoscope.