Question about loan

CoreyLewis96

Hi all,

I hope you are well.

I’m asking for advice in regard to getting a loan.

I’m 28 and 9 months ago I got a 5 year fixed mortgage with my partner.

At the moment I have a balance of over £1,000 with Monzo Flex, literally everything I pay for I got into a habit of flexing.

I have been trying close to a year and I just can’t get it down, I’m paying £400 a month when I get paid (as this is what instalments are) but by the time it’s pay day I’ve flexed to live as I end up struggling. I’ve done so many budgets, I’ve cut down on days/nights out to near 0 and literally spend nearly every day when I’m not working at home.

I’m thinking of getting a loan out for 1 year to pay it off, which would be approx £90 (had a Quick Look) and close down my Monzo flex account completely. Not only would this help financially but it would also help mentally.

How would this affect me? and affect when it comes to remortgaging?.

Any advice is massively appreciated. 

sourcrates

What your saying is that you are overstretched and constantly using your credit card to supplement everyday living.

So explain to me how getting a loan is going to help you budget better?

Now I know what your going to say, "I would have £290 more disposable income", well you might have, if you get the advertised rate, which most won`t.

Also there`s more than a good chance this "extra money" will be frittered away on other things, and you may still not be able to balance the books, this will only work if you are disciplined enough to stick to your plan, the majority of people who suddenly find themselves with extra money tend to use it on more credit, and end up consolidating ever increasing lines of credit for many decades to come.

Think carefully before you do this, it can be either the start of a very slippery slope, or, if you are lucky, the end of your financial mis-management.

CoreyLewis96

sourcrates said:

What your saying is that you are overstretched and constantly using your credit card to supplement everyday living.

So explain to me how getting a loan is going to help you budget better?

Now I know what your going to say, "I would have £290 more disposable income", well you might have, if you get the advertised rate, which most won`t.

Also there`s more than a good chance this "extra money" will be frittered away on other things, and you may still not be able to balance the books, this will only work if you are disciplined enough to stick to your plan, the majority of people who suddenly find themselves with extra money tend to use it on more credit, and end up consolidating ever increasing lines of credit for many decades to come.

Think carefully before you do this, it can be either the start of a very slippery slope, or, if you are lucky, the end of your financial mis-management.

Hi, I hope you are well.

thank you so much for getting back to me. 

I appreciate this advice and agree completely. I can only see how I get on if I do get a loan. With the extra £290 I plan to use this for savings or it would be spending money. I don’t have any other outstanding debt elsewhere and this has been my only issue so if I got rid of this completely I would hope I’d be completely fine and I’m determined to be. I’ve learned a very valuable lesson and don’t intend to buy anything now until I can afford and have saved for it. 

My main concern in regards to this question was how would it effect my re mortgage in 4 years time???

fatbelly

It will have negligible effect on the remortgage in 4 years provided you make the payments.

What I don't understand is that your £90 per month clears your Monzo balance in 12 months, the same as a loan would do.

Maybe you are thinking the interest would be less. Monzo lends at 29%, the best loans, which you might not get, are 13.5%. A balance transfer card is 0% with maybe a 4% fee

Brie

Maybe you need to look at your overall budget to figure out why you're so badly stretched.  If you go to the debt free board and fill out the SOA (on of the top stickies or on sourcrates signature) you can see better where you can cut things.  If you post it on that board others will be able to spot any holes in your budget so you can see where there's issues that need to be sorted out.  

Hoenir

Have you sat down and discussed this with your partner?