Should I get a secured loan??

Over the past few years I have managed to get myself (my wife helped) in some serious serious debt.

As things stand I owe:-

Barclaycard £5,000
Halifax £7,000
Lloyds £5,000
Lloyds Personal Loan £17,000
Barclaycard £1,000
Debit Card £1,000

I am thinking about getting a FirstPlus Secured Loan over ten years for £35,000.

I pay out just on the above £825 P/M and our combined monthly wage is £2,135.00. I have a mortgage to pay and other bills etc.

I have been looking at becoming a "card tart" but I am thinking it might be better to just consolidate all of this. I now have my spending in control but the interest on the above especially Halifax and Barclays is crazy and paying the minimum as I do I just cover the interest and the repayment cover charges.

I just don't think I could juggle moving from 0% Apr card to 0% Apr card with three cards. Any help would be appreciated as it is getting me down and causing problems in my marriage :(.

Thanks,
«1

Comments

  • mountainofdebt
    mountainofdebt Posts: 7,795 Forumite
    First Post First Anniversary Combo Breaker
    Hi

    It might be worth you posting aprs together with limits as well as your full budget so the guys (and dolls on here !) can advise you better.

    As for being a 'tart' well I've just woken up to the fact that no-body thanks you for being loyal so if they want to lend me money at 0% then so be it.......if the papers want to call me a 'tart' then carry on....sticks and stones etc!
    2014 Target;
    To overpay CC by £1,000.
    Overpayment to date : £310

    2nd Purse Challenge:
    £15.88 saved to date
  • mrcow
    mrcow Posts: 15,170 Forumite
    First Post First Anniversary Combo Breaker
    I'd agree, if you could post the APRs/settlement dates/repayment amounts of your current debts then it would help to see if there are better alternatives.

    The problem that I have with First Plus is that for a secured loan, it's not really giving you good value for money. It all depends on what APR you end up getting, but there are certainly cheaper ways of securing a loan (you could look to extend your mortgage deal etc.)

    There are also early replayment penalties with First Plus which also include an 'administration charge', you often won't get this with unsecured debts.

    Then there's the whole 'putting your home at risk' debate which you would then be tieing yourself to. What if your circumstances did change......a extra secured debt on your property is a risk that is not advisable to take if there are alternatives.

    You don't mention any adverse credit history that you may have, in which case, you could save yourself a fortune by some savvy switching on credit cardsloans etc. I personally think that it's well worth a look at your alternative options before jumping in feet first with a company like First Plus.

    In the very least, please have a good look at this article on the MSE site:

    Secured Loans: lending of last resort

    If you're going to do it, go in with your eyes open!

    Also make sure that you work out how much First Plus are going to charge you in total over the loan period. Over ten years, it's really going to add up with all of that interest (may make you think twice about switching some of that debt onto 0%!)

    Good luck

    mrcow
    "One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
    Because by then you've blown your chances. That's it."
  • Thanks for the responses. I'm a bit of a novice to all this APR stuff.

    Halifax Card: Cash 24.4% APR £53.60. Purchases 19.9% APR £47.11 P/M
    Barclays: Cash 23.4% APR. Purchases 18.9% APR
    Lloyds: Cash 1.356% APR. Purchases 1.094% APR

    I'm contemplating getting a Virgin card and an MBNA card. Then once I get them through and I know what my credit limit is, hopefully negotiating the limit to match the balances on my Barclays and Halifax cards and then doing the balance transfer. Then paying off as much as I can before sorting out another two credit cards 0% balance transfer and keep doing this and paying as much as I can until the debt is gone.

    There is not that much APR on the Lloyds so I might keep that as is perhaps moving it once I get one of the other two cleared. Does this seems like a plan?

    Thanks for the help so far.
  • mrcow
    mrcow Posts: 15,170 Forumite
    First Post First Anniversary Combo Breaker
    BeenAFool wrote:

    I'm contemplating getting a Virgin card and an MBNA card.

    Careful....Virgin Cards are MBNA cards, so you may have problems getting good rates on both cards (when I had both, they just split my limit between them, so there wasn't any benefit to having both). My advice would be to go for the Virgin card first, and see what they come up with (but others are more than welcome to disagree with me!).
    "One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
    Because by then you've blown your chances. That's it."
  • mrcow
    mrcow Posts: 15,170 Forumite
    First Post First Anniversary Combo Breaker
    BeenAFool wrote:
    There is not that much APR on the Lloyds so I might keep that as is perhaps moving it once I get one of the other two cleared. Does this seems like a plan?

    Please can you just double check that this Lloyds credit card 'APR' that you've quoted is actually an APR and not a monthly rate? (If it is a monthly rate, the APR will also be stated)

    It's not that I don't trust you ;) I just would like you to check to be sure? Was it a special offer rate? In which case, is there an expiry date on this offer?

    Many thanks.
    "One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
    Because by then you've blown your chances. That's it."
  • mountainofdebt
    mountainofdebt Posts: 7,795 Forumite
    First Post First Anniversary Combo Breaker
    Is it possible for you to transfer your Barclaycard debt to another card? The reason I'm asking is that Barclaycard are doing an offer an the moment 6.9% for the life time of the balance - although the limit you can transfer is 90% of your limit - but I was told by someone when I phoned in that the interest rate would be 5.9%.

    Also can you post your budget - I'm sure that people here can help you squeeze some extra cash out of your outgoings - but we need to know to help you!
    2014 Target;
    To overpay CC by £1,000.
    Overpayment to date : £310

    2nd Purse Challenge:
    £15.88 saved to date
  • Combined monthly income is £2,100.

    Bills Gas, Elec etc = £1,150
    Loan, Credit Cards =£850

    I'm hardly paying anything off the credit cards so I feel I should transfer the Barclay Card one to Virgin (hopefully). Do you think I could get £5K opening a Virgin card?

    Then you say Barclay Card have an offer on the lifetime of the debt of 6.9% I could then, perhaps transfer the Halifax one to the Barclay card?

    Does this sound a fair battle plan?

    I've got all my accounts now on a spreadsheet. In terms of budget I think I've sorted that side of things. My problem is not being smart about transferring balances and being nifty with my debt.

    I have thought that once I transfer my debt from Barclay card they would come knocking with special offers to attract me back.

    I'm off to apply for a Virgin card I think. Then once that comes through I'll hopefully get a £5k credit limit and transfer my Barclay debt across. Thats phase 1.
  • mrcow
    mrcow Posts: 15,170 Forumite
    First Post First Anniversary Combo Breaker
    I think Virgin offer about 1/4 or so of your salary, (at least in our case they did) but it will depend on how they rate you I suppose. When you know, then you'll have a bit more of a plan.
    I have thought that once I transfer my debt from Barclay card they would come knocking with special offers to attract me back.
    As long as they make it a good one ;)

    What's your APR on the Lloyds loan (and what are the replayments and how much longer do you have left)? It's a big loan is all, so I was wondering if you could make some savings there?


    Did you have another look at that Lloyds Credit Card APR? as the figures posted still look like monthly interest and not an actual APR to me?
    "One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
    Because by then you've blown your chances. That's it."
  • I pay £386.20 a month on the Lloyds loan. It is a Non-Cancellable LTSB Personal Loan. Monthly fixed rate of interest is 0.94% per month 11.9% APR. My wife did this and she took out the optional loan protection. The loan is £17,800 and the loan protection is £4,521.48. This was signed on the 11th of Nov 04. So there is a long way to go, my wife phoned up recently about how much it would cost to transfer it and was told £17,000. I'm thinking leave this as is for now.

    I think the APR on the Lloyds one will rise a great deal next month although I can't see anything about this. I'll go off it being around the same as Halifax.

    Either way my plan is to:-

    1. Sort out with Virgin enough credit so I can transfer my Barclaycard debt across. I have now applied for one online, I did not tick the "Interested in transfer balance" box. As I want to wait until I know my credit limit and if it is not enough then to speak with them and 'fingers crossed' get it raised to be enough for the entire Barclay card debt.
    *** Have I gone about this the right way? Even though I did not tick the box will I still be able to transfer the balance at 0% APR for 9 months?

    2. I applied for an MBNA Plat. Plus Card in my wifes name. Hopefully I can transfer my Halifax debt across to this one. The est. int. on next months Halifax statement is £120.00!!!

    3. Then in month 7 of the 9 month period I got these cards I will apply for another two cards or see if Halifax / Barclays come back with an offer. Keep transferring and paying as much as possible on these. Keep doing this until the debt is gone.

    4. Pray to God daily nothing crops up which costs money. I won't be making any large purchases again.

    ** Can anyone answer my question above about applying for 0% APR on balance transfer cards please?

    ** Does this seems like a good plan of action, Yay or Nay?

    ** Anyone think of a better solution that does not involve a time machine?

    Thanks for all the help so far it is really REALLY appreciated!!
  • mrcow
    mrcow Posts: 15,170 Forumite
    First Post First Anniversary Combo Breaker
    BeenAFool wrote:
    ** Can anyone answer my question above about applying for 0% APR on balance transfer cards please?

    Well we didn't tick the box either, and we were still able to balance transfer as soon as the card came through. I think that you can phone them and arrange a balance transfer as soon as you get the acceptance slip with the credit limit on it. If you don't hear anything in about ten days, call them and ask them how the application is going and enquire about a balance transfer then.
    ** Does this seems like a good plan of action, Yay or Nay?

    Well transfering to unsecured 0% lending sounds a much better plan than switching to 7.9% APR secured debt ;) So it's a 'yay' from me.

    I think that you need to take a look at everything that you're doing though. Switching a couple of credit cards is just the start. You should be looking at your current mortgage deal, your phone useage/supplier, your utility suppliers, your weekly shopping budget, insurance providers, car useage, any subscriptions that you have, selling any unwanted items, Sky TV packages & internet packages and the likes, budgeting for Christmas/Birthdays. Money Saving is a (very addictive) way of life. It's not about being cheap, it's about being clever with your money.

    And yes, I think that the Lloyds loan sounds very expensive for £17k of borrowing (11.9% with PPI on top :eek: ). There's got to be loads of better options out there for you? But if you want to leave this for now, then just go for one step at a time.
    ** Anyone think of a better solution that does not involve a time machine?

    Time machine.....I feel old enough as it is without ageing myself further!

    It is Boot Fair season BTW. I'm assuming that your 'debit card' debt is an overdraft? (sorry if it's not) In which case it's a VERY expensive way of borrowing money. You need to get yourselves into credit with your bank to avoid the ridiculous interest rates that they charge on authorised overdrafts (and STAY in credit each month with a budget!). Boot Fairs are great ways of clearing out junk, streamlining your home and making a few extra pounds. I started my first ones last summer, and can thoroughly recommend them as a focussing and cleansing process in more ways than one! (For one thing, you don't feel like buying any more stuff, as you realise what a load of clutter you have/had!).
    "One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
    Because by then you've blown your chances. That's it."
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