Loan to pay credit cards

[milly143]

Would it be a good or bad idea to get a low interest loan to pay off just under �3000 on two credits cards then chuck the cards in the bin and just pay off the loan. I also have another non secured loan of 2000.

[milly143]

To add on to that question, companies like Tesco do a loan whereby you don't start paying it back for 2-3 months. Would this be a good idea so I could get my bank balance back in order and clear my credit cards before repaying the loan. I need to do something.

[Hammer]

I all depends on the interest rates you are currently paying, and whether you can afford your current payments.

It's always a good idea to shop around and get a better deal, have you considered getting a new card with a 0% balance transfer introductory rate?

As long as the rate on your new card / loan is lower than the current ones, it would be a good move. If you are struggling and missing payments at the moment, that's a different story...

[Hammer]

For the Tesco loan, I don't know the full details, but try not to be sucked in by gimmicks. Make sure the APR is not bumped up to make up for the delay!

[milly143]

the APR would be about 12% over 4 years repayment. About 80 quid a month. I was thinking that if i could have a break for a couple of months and get back within my over draft limit then i can easily afford the payments. I get paid more then enough to afford my necessary outgoings its just i went a bit off the rails and am struggling to get back in. I want to try and sort it out now before its gets worse and I end up with more then 3 grand worth of debt.

[Hammer]

Very wise to sort it out now before it gets worse.

There are loads of options for you to get back in control, the loan you mention is as good as any. Just make sure you research it properly first and get the best deal you can - have a good look around somewhere like here or here for some good advice.

Good luck!

[Hammer]

Fist link doesn't work - should be this

[Bangkok]

If you are struggling to get the balances down, it is a good idea to obtain an affordable and competative loan to pay them off and then chop the cards into bite size pieces.  It's a real rat race paying off credit card balances a bit at time. 

I had this a few years back, and found that lenders wanted substantial arrangement fees to lend me money for paying off a card.  However, when I applied for a loan for a holiday, the arrangement fees didn't come up.  I would never advocate lying to a lender, but I had a everlasting holiday from paying the card off, and I did not hide any details of my financial state. 

Since then, I have never not paid a credit card off each month.  Too scary.

[Hammer]

Telling fibs about what you want the money for is fine in my opinion. It's none of their business, either you are credit worthy or you are not. As long as you don't lie about your income or existing credit you will be fine.

Tell them you want plastic surgery!

[milly143]

I just wish I had listened when everybody told me to never get a credit card! Im just glad I havnt taken any store cards out.

[Freg]

I would have to disagree with Hammer that lying to gain financially is a good idea (well, lying isn't great, financial benefits or not). I would also say that it is completely the lender's business as it is their money that they are lending out! These people should know what they're talking about through experience. They will have their reasons for lending money or not, one of the factors being the reason for the loan.

It is, of course, up to you what you do.I hope it's all under control, you sound like you know what you're doing. Good luck paying it off!

[theren_911]

I'd personally disagree with Freg - from personal experience, this time last year i was in almost the exact same situation. I went to the bank, told them that I was clearing all my credit/store cards and a bit extra for a car.

As soon as i mentioned "car" the interest rate rose by 2% - it was like the advert, "brand new customers only"

[mongos bird]

Hi Milly, if you consolidate the balances on your cards with your other loan of �2k, you may qualify for a lower APR than having the debt in two loans.  Good luck!!

[mongos bird]

(adding to above post)

Generally, the more you borrow, the lower the APR. . . .