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Kai2008
Kai2008 Posts: 1 Newbie
I have one credit card and 1 loan total £40.000. They cost me £1,191 per month. Would I be better trying to pay off with a lower rate loan?

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  • CliveOfIndia
    CliveOfIndia Posts: 2,676 Forumite
    1,000 Posts Second Anniversary Name Dropper
    edited 3 November at 4:44PM
    Who can say?  What rates are you paying at the moment?
    Do a few eligibility checks, see what you get offered.
    Although, consolidation is not always a good idea.  Firstly, it can be all too tempting to pay off the card, then go out spending on it again.  You need to address the root cause of the debt, not just shift it from one place to another.
    But the bigger stumbling block is often affordability.  A lender cannot force you to use a new loan to pay off your existing debt.  They therefore have to make the assumption that the new loan would be in addition to - not instead of - your existing debt, and will factor this into their affordability calculations.  This often results in the loan application being declined, or else accepted but with quite a high APR.
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