Loan Consolidation?

extra gravy

I have a bit of dilemma at the moment. I have a couple of old credit union loans from when I was young and reckless and they are taking an age to pay off. I was hoping to start saving for a mortgage as my apartment might be coming on the market soon. It would be a good investment opportunity. I'm torn between a few options:

(a) Continue to pay off loans as I am and start saving towards deposit

(b) Apply for a debt consolidation loan and pay these older loans off in a lump sum

(c) Forget about mortgage altogether and put all my savings towards clearing these loans.

I've got the debt down from about 30k to 10k but I guess this won't matter when it comes to applying for a mortgage.

Phileas Frog

Forget about saving for now. Whatever savings you have already, put them against the loans. Finish paying off the loans then resume saving again

extra gravy

The only thing holding me back is I've been in this apartment for 6 years and am very happy here. I guess I'm trying to plan for the future as well as dealing with my past and I was trying to convince myself that I can do both at the same time!

Avatar MIA

extra gravy wrote: »

I have a bit of dilemma at the moment. I have a couple of old credit union loans from when I was young and reckless and they are taking an age to pay off. I was hoping to start saving for a mortgage as my apartment might be coming on the market soon. It would be a good investment opportunity. I'm torn between a few options:

(a) Continue to pay off loans as I am and start saving towards deposit

(b) Apply for a debt consolidation loan and pay these older loans off in a lump sum

(c) Forget about mortgage altogether and put all my savings towards clearing these loans.

I've got the debt down from about 30k to 10k but I guess this won't matter when it comes to applying for a mortgage.

Credit union loans can be easy to get, but expensive (interest wise).

€10k loan outstanding is subjective depending on your income.

I'd consider combining into the best variable interest loan account and paying off as a priority.

Then save. Unfortunately you'd need at least 10% of the apartment value to qualify for a mortgage.

extra gravy

Avatar MIA wrote: »

Credit union loans can be easy to get, but expensive (interest wise).

€10k loan outstanding is subjective depending on your income.

I'd consider combining into the best variable interest loan account and paying off as a priority.

Then save. Unfortunately you'd need at least 10% of the apartment value to qualify for a mortgage.

I was planning on asking them if they'd waive the interest if I can agree to pay off the loan in a shorter time frame with higher monthly repayments. I'm furious with myself for getting into this situation in the first place but I suppose there's no point beating myself over it now.

Avatar MIA

extra gravy wrote: »

I was planning on asking them if they'd waive the interest if I can agree to pay off the loan in a shorter time frame with higher monthly repayments. I'm furious with myself for getting into this situation in the first place but I suppose there's no point beating myself over it now.

Don't do this if you're looking to get a loan in the next 5 years at least. It will be treated as a default and your credit history will be battered.

vkus6mt3y8zg2q

extra gravy wrote: »

I was planning on asking them if they'd waive the interest if I can agree to pay off the loan in a shorter time frame with higher monthly repayments. I'm furious with myself for getting into this situation in the first place but I suppose there's no point beating myself over it now.

Sure just ask them will they let you off the entire loan also

kippy

extra gravy wrote: »

I was planning on asking them if they'd waive the interest if I can agree to pay off the loan in a shorter time frame with higher monthly repayments. I'm furious with myself for getting into this situation in the first place but I suppose there's no point beating myself over it now.

A bigger issue for you may be your credit rating. Its no immediately obvious if you have missed payments or are being etc

extra gravy

Avatar MIA wrote: »

I'd consider combining into the best variable interest loan account and paying off as a priority.

Thanks Avatar. How would I go about doing this?

extra gravy

Laney Angry Cattle wrote: »

Sure just ask them will they let you off the entire loan also

Thanks for your input.

extra gravy

kippy wrote: »

A bigger issue for you may be your credit rating. Its no immediately obvious if you have missed payments or are being etc

I missed a few payments due to being off work sick at various stages but I haven't missed any in the last few years. I have some health issues and the stress of this doesn't help either. I want to clear the loans but also want some security going forward as well.

Avatar MIA

extra gravy wrote: »

Thanks Avatar. How would I go about doing this?

First of all find out the interest rates you are currently paying on your various loans, then find a bank that are offering lower interest loans.

At a guess you're paying 11% plus on you CU loans, and could get less than 9% from a bank. You may need to take out (and qualify) for a loan greater than 10k to qualify for the better bank rates.

Missing some payments won't have helped though.

extra gravy

Avatar MIA wrote: »

First of all find out the interest rates you are currently paying on your various loans, then find a bank that are offering lower interest loans.

At a guess you're paying 11% plus on you CU loans, and could get less than 9% from a bank. You may need to take out (and qualify) for a loan greater than 10k to qualify for the better bank rates.

Missing some payments won't have helped though.

Okay thanks for the advice Avatar, appreciate it.

notharrypotter

There is a lot of details missing. So any advice you may get is based exclusively on poor information.
You mentioned loans as in more than one.
What are the nature of the loans (car/holiday/previous debt rollover etc)?
Are you currently employed?
Are you able to service the loan(s) currently?
What length(s) is remaining (are remaining) and what is/are the outstanding balance(s)?
Do you currently have savings with the CU?

It's unlikely that you would get a loan without collateral unless it's for a car.
Which is possible based on the amounts you quoted.
If there is a car how old/reliable is it?
Are you likely to be looking at replacement in the near future (2 or 3 years)?



It may be possible to overpay the one with the shortest time (or balance) outstanding.
Once this is cleared then apply this strategy to the next loan and so on.



If there are savings then when the outstanding balances are less than the savings used the savings to clear the remaining loan(s).


You mentioned illness which caused missing payments.
Is this likely to recurr making a mortgage difficult?


Getting proper advice tailored to your circumstances might be worthwhile.