Quick Query - Tesco Loans

SomersetPrincess

Morning all just a quick hello and to ask advice on a consolidation loan from Tesco. OH and I currently have about £14,700 of debt in 2 loans (£3000 and £5,600), 3 credit cards (£2000, £2,000 and £1,000), and overdraft (£1,700). We currently pay about £470 a month on loans and minimum payments on the cards - no provision made for the overdraft. Our credit score is bad at the mo so this is just a query, but Tesco online are doing loans for £15,000 over 5 years for about £344 a month (quote APR 6.6%) - seems quite good - anyone have any opinions on us applying for this in a few months (need to let my credit score recover for a bit)

Thanks!

Nicky_3

At the end of the day, anyone dealing with debt or advising on debt related issues, are never really comfortable with suggesting consolidation loans, because they know time and time again, people opt for this and it results in a worse situation then before, mainly because, once a card has been paid off, its still laying around the house and the temptation is there to use it etc. Therefore, dealing with the debt and creditors you already have seems to be a better solution.

However, having said that, if you are the type of person where you know you can comfortable afford to pay the monthly repayment, are disciplined enough not to take further credit by using to the credit cards then it could be a good solution.

Only you know which category you fit into

SomersetPrincess

Thanks Nicky - I appreciate your advice!

Xbigman

The problem is that with a poor credit score you won't get a loan with a really low APR. You also don't say how long your existing loans are for. If less than 5 years you have extended your repayment time and therefore your total interest payable. Did you take out your existing loans and then run up the credit cards? If so you are living beyond your means and that is what you need to address, not shift your debts around.

Prepare a budget you can live with and include all the details of your debts (APR, min payments and lengh of loans) and post it here and we can advise on the way forward. It is unlikely to feature consolidation.
Regards



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