Loan to pay off cards

blondeyk89

CliveOfIndia said:

This is a terrible idea on so many counts.

Firstly, the illustrative loan rate you've been given is far from guaranteed.  Since a lender cannot force you to use the loan to pay off existing debt, they have to assume that any loan would be in addition to - rather than instead of - your existing debt.  They will therefore assume you'd be carrying double the debt when they do their affordability calculations, which will affect the rate they actually offer you.

Secondly, it's all too easy to use the loan to clear the credit cards, then merrily go out and start spending on them again - meaning you could well soon be in double the debt you started out with.

Thirdly, the idea of moving the debt to an even higher rate of interest is - no disrespect intended - absolutely bonkers.

The way forward is, as previous posters have pointed out, to knuckle down and throw every spare penny you can at the debt, prioritising the highest-rate debt first.

If you feel so inclined, complete an SOA and post it up.  You'll receive plenty of helpful suggestions as to where you may be able to make savings in your expenditure, allowing you to throw more at the debts and clear them more quickly.

Thank you for your comments. 
I'm going to leave well alone and take the advice given here. 

blondeyk89

Thanks everyone. I think I have enough opions and the concensus is stay well away! Which is what I will do. 

Andyjflet

Its a no from me, follow dave Ramsey and snowball the cards and get them paid off. Then never use credit again. 

RobM99

No chance of a balance transfer to a 0% card?

Lonelygambler

Here is a truth for anyone looking.

I am an addict. 

I took a £10k loan on a low rate and I can / could easily pay the re-payments. 

I didn't use the loan to clear debt. I gambled a lot of it and wasted most of it on nothing and everything. 

Don't be like me. 

LG

enthusiasticsaver

As you have already heard taking out a very high interest loan to pay off the cards is an awful idea. I assume as the loan is such a bad rate you have a poor credit history and are unable to get 0% deals? That would be the only reason to move the debt.

If I were you  I would be looking to cut back as much as you can on non essential spending and pay as much as possible off the £3k monthly rather than just chip away at it slowly as the interest rates are high. I would recommend you at least pay more than minimums as that will increase the chances of being offered 0% deals. 

RobM99

Any update on this?

sourcrates

RobM99 said:

Any update on this?

OP, last active 2nd May, so not hurrying back.