Good Idea / Bad Idea

[jennywren]

Debt Consolodation with a reputable company?

Ok Im trying to think of ways to get some extra money to subsidise SMP while Im off work, pay for some baby gear and I also wanted my visas paying off, this is what Ive come up with, is it a good idea or a bad idea.

Currently i Pay:

£200 p/m loan which is paid off Oct 2009
about 6k on Visas which I only pay min amount which is £110 a month so they will be paid off this side of never
£600 on Mortgage (OH pays all bills & food)
£50 mobile
£50 petrol


Im wanting to get a £20k loan over 10 years with northern Rock so I can:

Pay £7k balance of Loan
Pay £6k Visas
Use £5k to subsidies SMP while off work
Use rest to Buy much needed Baby stuff

This will cost me £200 a month

Ive been umming and ahhing over this for about a month, ill apply after 20th jan so I have 2 wage slips on my new higher wage. I was worried it would affect my mortgage app but ive spoke to my mate who is doing it for us (getting it through work anyway) and she said credit score only affected if you apply for lots of things and are refused so I shoudl be OK, I hope!

Whats people opinions?

The pro's for this are that it will freee up £100 a month, I know I have a set term of 10yrs so visas paid off, and I can have time off work after baby is born! i

 

[Flame]

The loan will go through a credit check and will affect your credit score especially if you get turned down for it and will show on your mortgage application, also the loan will go against the amount you can borrow for the mortgage.

I have used debt consolidation companies before and i went with one called household bank, they are really bad and messed me about and conned me out of a lot of money, eventually i moved to natwest with the loan and i am paying half the amount per month.

If i had the choice again i probably wouldnt have gone for the loan as it just frees everything up and you end up using all your credit cards again and end up in more debt and having to get a bigger loan later on to clear that debt to.

Good luck with whatever you decide to do though.

 

[jennywren]

The loan will go through a credit check and will affect your credit score especially if you get turned down for it and will show on your mortgage application, also the loan will go against the amount you can borrow for the mortgage.

I have used debt consolidation companies before and i went with one called household bank, they are really bad and messed me about and conned me out of a lot of money, eventually i moved to natwest with the loan and i am paying half the amount per month.

If i had the choice again i probably wouldnt have gone for the loan as it just frees everything up and you end up using all your credit cards again and end up in more debt and having to get a bigger loan later on to clear that debt to.

Good luck with whatever you decide to do though.

Its not going to affect what we can borrow as were already borrowing less than our max plus I work for the B/S and there pretty generous with staff borrowing more than they should (which IMO is not a good thing, which is why I wont borrow over my means for a mortgage!) but ive confirmed with my friend who is a mortgage advisor who said it will not affect the amount we want to borrow for the mortgage even if I get turned down, it will only affect it if we apply for say 4-5 loans and get turned down for all of them so with that bit clarified for me im not to worried about that side of things!

I choose northern rock as they have a low int rate, its fixed and they are a reputable company. Id never go for one of these TV advert loan companies and never do a HL loan in fear of being ripped off (like you were unfortunatley) so hopefully northern rock will be OK!

I think that they should agree the loan (I hope) as wage has just gone up to 21k and the only things I have in my name are obvioulsy the mortgage (which is joint) the Loan & Visas and a Mobile,. and im stating on the app that the loan is for consolidation of the loan and visa so they will take in to account its not in addition to my current loan/visas but instead of - hopefully lol

well ive got till next payslip arrive to decide so plenty of time for advice!

Oh and i did speak to OH about it and his reply was do what you want love its your money...........big help, cheers feller!

 

[cassi]

when you apply to northern rock for a mortgage (we have been getting lots of mortgage quotes ) or any company they ask for any outstanding loans or debts and it does effect the amount you can borrow,,,hence we are selling the house and using some equity to pay off all loans and debts before getting the mortgage out so its not affected,,,

 

[tracyM]

If you do go for the loan, cut up your credit cards (unless you can resist temptation) or before you know it they'll be back up to £6k.

 

[Jo]

Would you maybe be better doin a remortgage and including all debts in that?
Thats what we have just done and we are around £200 a month better off and have some cash to play with

I have the name and number of a great financial advisor who doesn't even charge us
If you wnat his number PM me

 

[Misslarue]

If you do go for the loan, cut up your credit cards (unless you can resist temptation) or before you know it they'll be back up to £6k.

Definately make sure you do. I took out a loan to pay my credit card off and now its back up to £5k

 

[budge]

god its good to see im not the only one with a £600 a month mortgage

Jennywren - trnasfer your visa balance to one with interest free. When the limits up on that transfer to another etc. At the mo you are just paying interest every month so nowts getting paid off.

 

[Tick-Tock]

When I finished university I took out a £4K loan with cahoot to pay off all my cards etc as the minimum payments were killing me. Its something I'd recommend as it really made my life easier. However, they did take the amount remaining into account when we applied for our mortgage so if you think that may be a problem then I'd get some professional advice. Also i would advise transferring to an interest-free card (something I've done as my empty cards after the loan were approaching full...... cut them up!!!) but don't do this too often as your credit rating will be seriously affected..... I have a friend who is in dire straits because of her "rate chasing" habit at university. (Its all to do with getting marks against your credit rating when you apply for a card/loan... do it too often and you get too many marks and then a bad credit rating)

 

[littlebump]

Hi hun

Double check the interest rate, repayment terms and the amount/term of the loan. Repaying £24k for a £20k loan over 10 years works out at less than 4% per annum compound. I'm worried they've misquoted you.

Also what's the penalty for early repayment and how early could you repay you may be in a position to repay it early in a few years time.

Feel free to PM me if you like

LBxx

 

[jennywren]

Thanks for the opinions everyone, muchos grasias

Relevant people PM's cheers chicks!

Oh and yeh if I got a new loan the CC's would be chopped up and a straight letter to close the accounts as thats the mistake I made a few years back!

Can repay at anytime with no charges which is what I want as athough im prepairing for the 10yr payments, If we say make a huge profit on a house, or are in a position to remortgage down the line (were not at the moment as looing for a new house as it is) or win the lotto i would pay it off