Markus

Ok, need some help here.

I need an unsecured loan for about 25k (to pay off existing load plus hughe credit card bill). My bank (Abbey national) Will only increase my existing loan to a max of 15k which is not enough, need basically and additional 14k on top of that.

So, what options do I have open to me? I'm living at home, so cannot have a secured loan, as I have no property.

Ideally I'm looking at a 5 - 10 year repayment schedule, so monthly repayments are not too big, ideally looking for around 200 - 500 a month to repay.

So, ideas please? I don't really want to do the credit card dance, ie; move to one with 0% on transfers for 6 months to save a little bit of cash then keep moving every 6 or so months

Ideally I want to consolidate the CC and the loan into one big loan, and pay that off over 5 - 10 years (pref nearer 10), so low monthyl repayments.

Help.

And please, no comments asking why I need this, or why did Iet myself get into this situation, or comments like, "you're ****ed, you just have to buckle down and pay it off" Trust me, you would get a response you do NOT want or like. Oh and I'm not selling the car either, mainly as it's not in a saleable state, plus I don't want the hassle of trying to sell it and then get another car.

Alpine

Try one of the online finance sites that do personal loans.. Much less painful than being turned down by a human.. Directline.com springs to mind.. I believe they do unsecured up to 25k.. good luck

Markus

Thanks.

am looking at Tesco's and Sainsburys as well, as they seem to do what I want, ie; 25k over 10 years

MarkO

Why did you get yourself into this situation? You're f*cked. Why not just buckle down and pay it off?

Oh, and what about just selling the car?

Seriously though, try Royal Bank of Scotland's direct banking. I did a consolidation loan with them a few years ago and they were very good and very competitive.


[Edited by MarkO - 7/23/2002 10:56:26 AM]

Markus

Oi! Mr O, noooooooooooooooo! :

spooky, am on the BOS site now.

thanks.

RiMo

Markus,

Checkout www.moneyextra.com for current loan rates etc.

I personally use Egg (http://new.egg.com/visitor/0,,3_11060--View_819,00.html) and Intelligent Finance (http://www.if.com) for my financy stuff and both have proved excellent. The beauty of these guys is that they are very flexible i.e. they allow overpayments and payment holidays without charges. They also have very competitive rates.

Rich

muppet paster

Markus, how about selling the contents of your wardrobe...

ScoobyJawa

Wouldn't he have to pay someone to take it? (only kidding mate!!)

Seriously though - know the feeling. Been trying to get a loan to pay off my CC, a loan to pay em off would be cheaper than the CC payments but no one will give me a loan [img]images/smilies/mad.gif[/img] (eg the payment would easily be covered by what I'd save from the CC payments but try telling them that )
Not sure if its due to only being in my own house for just over 1 year or what

JoeyDeacon

Just had a look at Tesco and they seem pretty good. I would have to say that you should try and borrow the money over the shortest amount of time you can possibly afford. Firstly for purely financial reasons and secondly for psychological reasons. If you are borrowing the money over 10 years you are soon going to get p!ssed off seeing the direct debit going out of your account each month, knowing it will be for the next 10 years. At least if it is over 5 years you can see the light at the end of the tunnel.

Borrowing 25K from Tesco over 10 years (with no payment protection) works out at £293.95 a month. This means you will pay back a total of £35274. Look at all that lovely interest they are making for doing absolutely nothing!

If you borrow the same amount of 5 years it will cost £498.33 a month. You will pay back a total of £29899.80 (saving you £5374.20)

Other advice would be to cut the credit cards up today. Speaking from experience I know how easy it is to build them up to a point where you start to wonder if you can ever pay them off. I had about £8000 on my credit cards and even the interest each month was getting silly. I have been transfering the balance between cards for the last 12 months and it will be totally paid off in October. No credit cards are allowed in my house anymore.

First thing I did when I wanted to get out of debt was firstly get rid of all the unnecessary outgoings I had each month. For me that was firstly my mobile phone which was costing me £50 a month and then secondly I got rid of the Impreza. Annoys me when friends of mine moan about having no money when they are spending £50 a month on their mobile, £50 a month on Gym membership and are out drinking every weekend.

If you are serious about getting out of debt then you are going to have to work out a budget and stick to it. Get online banking as well as it makes you spend less money when you can see your account balance on a daily basis.

MarkO

I totally agree. I sorted a 'consolidation' loan (the RBoS one mentioned earlier) nearly 4 years ago, and did it on the basis of 4 years, rather than 3. I'm now wishing I'd just tightened my belt a tiny bit further - as it'd be gone by now.

ScoobyJawa

Also check the small print. Ideally you want a loan with no early repayment penalties. That way, if you do get the chance you can pay the loan of early at not additional cost.........

Markus

Thanks for all the advice. Am now looking at 25k over 5 years with tescos. Gonna apply and see if I'm rejected, if so then I'm hunting elsewhere, if not then sorted.

Will let you know what happens.

Glad to know that I'm not the only person in/has been in a situation like this.

carl

Tescos Finance is actually Royal Bank of Scotland (at least that's what it says on my bank statement every month).

If you get really desperate you could always call Ocean Finance who advertise on the TV. The trouble is the people in their ads who've got loans off them look like the dregs of society

ScoobyJawa

Mate,

The other thing to bear in mind is not to do too many applications in a short space of time as this will effect your credit rating. Try one or two and then wait a month or so. Sister used to work for a bank and told me this last time I was looking for a loan - too many applications = bad.

Good luck!

Markus

Thanks chaps.

Have only applied to Tesco's at the moment, will wait and see if rejected before proceeding. fingers crossed.

MattN

might be worth speaking to them first about their lending.

Most companies will only lend up to two thirds your salary. That said if you've been a good customer etc. no othe routgoings then they may lend more.

Just say no to payment protection.

Markus

Well, tesco's have provisionally said yes. They are posting me docs and want to see bank statement, which might then scupper the whole thing, but we'll see.

carl

Why would that scupper it? Surely you must have verified yourself that you have enough each month to pay off the loan? If you've explained it's for consolidation purposes, they should realize that you won't be making payments on the credit cards.

Markus

indeed, just me being my pessimistic self! Never like to be happy for too long

Tiggs

nat, are you 100% sure- that sounds VERY odd if they are gonna charge you 4 years of interest for a borrowing you dont have.

T

carl

That's the way it works with personal loans, isn't it? They add on the interest at the start, so until you're something like 2 years in you haven't actually paid off any of the debt.

Tiggs

no, thats not how it works.

T

carl

That's how it worked with the last one I paid off early

MattN

it depends on the amount.

I can't remember if it's 15k or 25k but whichever the limit is the credit consumer act says you can only pay off a maximum of 3 months interest as a penalty.

Anything over that limit your on your own.

I'm pretty sure it was 25k - which is why most companies won't lend more than this.

So if you've had a loan under 25k (or 15k i if I'm wrong) and they've charged you more than 3 months interest then they are liable.

It WILL say on your terms and conditions so read them!!!

MattN

carl,

It doesn't work that way, they can't add the total interest to the capital at the begining.

It's all done by calculating the monthly debt add the monthly interest accured less the payment made.

So a 10k loan at 12%

Means in the first month you owe 10k the interest for that 1 month is 1% so that is added to the debt so the debt lies at 10,100 you make a payment of say £300 so the debt is £9,800 another 1% interested is added the next month, you make a payment.

well that's a simplified version of it anyway.

You pay off more interest than capital in the first half of the term. That's why it's not always a good idea to jump in and get a loan. Of a £250 payment the first few months could have you paying £200 interst and £50 capital. So if you settled after 3 months, you've made payments totalling £750 but have only paid off £160-£170 of the debt add the 3 months early repayment penalty and you've found you have paid circa a grand to borrow xxxx over 3 months.

No company like tesco's or HSBC can load a loan with interest at the front and force you to pay that first.

MarkO

Anyone see "Your money or your life" on BBC2 last night?

Woman managed to run up non-mortgage debts (credit cards, etc) of £58,000!!! Her mortgage was only a grand more than that!

The end result was that it was going to take her about 8 years to pay it all off. Even if she'd sold her house it would've taken 4 years.

Scary stuff!

barge

Credit debt is very easy to get in to

Markus, hope all goes Ok, be careful & check everything before you sign

MattN

Nat,

Mail me the details and I'll look in to it for you.

Matt