QWERTY1999

I currently have around 7.5k on a personal loan and 1.5k credit card and pay out around £260 pm on these debts.

With the current credit crunch, that £260 could really come in use as things are getting very tight and my bank account is looking grimmer each moth.

I am considering extending on my mortgage. Borrowing an extra £10k to pay off the debts mentioned.

Ant thoughts. Is this a wise move?

SteveScooby

iTrader: (2)

if it's secured against your property then the interest rate should be cheaper than what you're paying now, although you could probably find a credit card with 0% interest that you could transfer the debt to, which might be better

phil_wrx

iTrader: (2)

u can be my slave for the next ten years while in that time i will pay the bill but u will pay in other ways

boxst

The interest will be cheaper. You have to check there are no penalities for paying off the loan early as that would wipe out any gains.

You will be paying much more for your loan in the longterm as the interest will be acculumulated over the duration of your mortgage and you'll be paying it upfront. You should still aim to pay the £260 a month against the capital of your mortgage when you can.

Steve

rb5_336

0% ccard seems to be the best option in that scenario, but will you get enough credit/limit on the card to cover the loan ?

PeteBrant

WOrth bearing in mind that a top up load on your Mortgage will more than likely have a fee attached ot it.

A friend of mine recently went to add £8k to his Mortgage, and they wanted a £3.5K arrangement fee.

Lisawrx

iTrader: (1)

9k on a credit card is an awful lot, bit that isn't to say it wouldn't be possible, depending on the OPs credit rating. I wouldn't probably do that myself, as while you have the 0%, it would be too tempting to just pay the minimum, and speaking from experience, by the time that period is up, you would have paid next to nothing back. Then once the 0% period is over, you have the hassle of trying to get another card with 0%, with a high limit, or you would probably end up paying alot more in repayments than you are currently with your loan.

Is it not possible to get in touch with who you have your loan through, and see if combining the loan and credit card, and possibly extending the repayment period, would bring down your monthly bill? Having a bigger loan, and possibly your credit score may be different now than when you took out the original loan, may change the interest you pay. Also, you could look about to see if taking out a loan elsewhere, to consolidate the two payments, may be cheaper. Otherwise, it can't hurt to check with your mortgage provider to see how you stand, adding it onto that.

Good luck, hope you get sorted. Feel free to ignore me, as I'm crap with my own money.

PeteBrant

A low rate for the life makes much more sense that a short term 0% rate.

Lisawrx

iTrader: (1)

Why thank you Pete, for summing up in 1 line what I was trying to get at in my essay.

PeteBrant