Loan question

holyjoe

hi, looking for some advise please,

i owe about 3000 euro between two different credit cards and i want to
just clear them off and cut them up for good.
I have very little savings so cant use them and was thinking of getting a
loan and paying it back over 12 or 24 months.

i know its not a huge amount but i dont have any accounts with any other banks or credit unions and woundering if i have any options beside try to
get a loan with my current bank?

thier loan rates are pretty high so was woundering if i have any chance of a getting a loan from a credit union or another bank with a better intrest rate without having any accounts or savings with them.

Pablo Sanchez

The credit union may be an option but they will ask you to lodge a certain amount of savings into an account as collateral eg 10% of loan value, this figure differs if its your first or subsquent loan with them.

This money cannot be touched until the loan is paid off.

drunkmonkey

I'm not sure which company is doing the best balance transfer offer (MBNA 0% for 10mts), but you could take advantage of the 0% intrest for 10mts which would give you a chance to attack the capital owed...

Save €2 + euro a day in a jar if you can, you'll be surprised how much you've cleared off your credit cards in 10mts

ferga_com

I agree with drunkmonkey. Halifax and Tesco also offer 0% for a few months on balance transfers so you can start with MBNA, then switch to Halifax and then Tesco - there may be others. You may pay the Stamp Duty but that should be less than the interest. Cancel the cards and accounts after the initial interest free period.

Be careful not to run up any more debt on Credit cards while paying them down. If you're not that great on the self-discipline, cut up the cards now. Or alternatively, put them in a glass of water and stick them in your freezer. That way, you can still use them in emergencies but you'll have to think about it first.

holyjoe

thanks guys, to be honest ive already did a balance transfer for some of the amount to halifax for the 6 months free intrest period but thats nearly up now and to be honest i havent paid that much off the card. not as much as i hoped anyway.

thats why i just want get a loan now, pay off both cards, cut them up and just let the loan amount coming out of my account every month and
forget all about them.

i think ill just apply to the bank im currently with.
but i suppose i should really should really set up a credit union account in
case i ever need a loan again in the future.

ferga_com

Don't forget that you can set up a Direct Debit from your account to pay a fixed amount into your Credit Card.

holyjoe

ferga_com wrote: »

Don't forget that you can set up a Direct Debit from your account to pay a fixed amount into your Credit Card.

Ok, an update on this, i applied for the loan with my own bank online and was refused!
was told over the phone that i would have to go into my local branch to discuss debt restructuring

I presume this is because i put down on the loan application the purpose of the loan was to clear off my credit cards.
anybody know what they mean by debt restructuring or what it involves? The only other debt I have is a car loan which is has only 11 months left to pay.

drunkmonkey

holyjoe wrote: »

I have is a car loan which is has only 11 months left to pay.

this mighten be great advice but you've a line of credit already established with you car loan, you could get onto the finance & leasing section of your bank and ask for a top up on your car loan account as your changing car(nod nod, wink, wink;)), ask them to increace the term to 3yrs or so, get the cash, and then clear off your credit cards....only problem is you won't be able change your car until the loan is nearly paid off again......
i.e your not getting a new loan, your just adjusting your current car loan, this will proably work, it has for me in the past...

if you had any bounced payments on your account, like a direct debit that didn't go through in the last 3mts it might cause you to be refused the loan...

holyjoe

drunkmonkey wrote: »

this mighten be great advice but you've a line of credit already established with you car loan, you could get onto the finance & leasing section of your bank and ask for a top up on your car loan account as your changing car(nod nod, wink, wink;)), ask them to increace the term to 3yrs or so, get the cash, and then clear off your credit cards....only problem is you won't be able change your car until the loan is nearly paid off again......
i.e your not getting a new loan, your just adjusting your current car loan, this will proably work, it has for me in the past...

if you had any bounced payments on your account, like a direct debit that didn't go through in the last 3mts it might cause you to be refused the loan...

ive never in my life have had a direct debit bounced or missed payment on any of my loans or credit cards. which has me woundering, do they just not want me to pay off the credit cards as they make so much money from them!

anyway,im sorry now i told them the purpose of the loan, i should have just said it was for a holiday or something!

drunkmonkey

holyjoe wrote: »

anyway,im sorry now i told them the purpose of the loan, i should have just said it was for a holiday or something!

not to late, Try the finance and leasing section (that's where your car loan would be, call them on the phone), it's different from where you applied for the personal loan, just tell them your changing your car, nothing got to do with your credit cards.....there usually back with a decision quickly...the loan is already in place so it would be pretty easy for them to give you a 3k top up on the loan...

dclare

Why don't you take a credit card deal (such as the 10 months at 0%), switch the balances and set up a direct debit to pay down as much of the outstanding debt as possible over the 10 month period.

Just make sure you don't get deeper in debt in the mean time.