Personal Loan advice

[crazy about cars]

Hi all,

I have a personal loan with my bank which I'm 1 year into the 5 year term (50 months remaining out of 60). The loan itself is at 4.4% APR.

I've done some very quick shopping around for personal loans and have found one at 3.4%. I know it's still subject to approval however by my calculations if I take out a new loan at a 5 year (60 month) term I can pay my current personal loan @4.4%APR in full (no early settlement fees) plus also settle a credit card balance in full. I'll end up paying slightly less monthly loan repayments however I will be back in debt for 5 years.

I'm thinking of the pros and cons of doing this. I can still settle the credit card balance in full without loan however will struggle a little. My concern of taking out another loan is that it will affect my credit history, I'm looking to apply for another mortgage in around 3 years time.

Any advice greatly appreciated!

[sidicks]

crazy about cars said:

Hi all,

I have a personal loan with my bank which I'm 1 year into the 5 year term (50 months remaining out of 60). The loan itself is at 4.4% APR.

I've done some very quick shopping around for personal loans and have found one at 3.4%. I know it's still subject to approval however by my calculations if I take out a new loan at a 5 year (60 month) term I can pay my current personal loan @4.4%APR in full (no early settlement fees) plus also settle a credit card balance in full. I'll end up paying slightly less monthly loan repayments however I will be back in debt for 5 years.

I'm thinking of the pros and cons of doing this. I can still settle the credit card balance in full without loan however will struggle a little. My concern of taking out another loan is that it will affect my credit history, I'm looking to apply for another mortgage in around 3 years time.

Any advice greatly appreciated!

Have you got a balance outstanding for the existing loan?

[crazy about cars]

sidicks said:

Have you got a balance outstanding for the existing loan?

Yes I have. Taking the new loan will settle this plus the CC balance.

[rsbmw]

Consolidation is a fairly typical use for a new loan, the issue may be affordability as they have to assume you won't use the new loan to pay off the old one and the cc, thus you will be servicing all three for the next few years.

[crazy about cars]

rsbmw said:

Consolidation is a fairly typical use for a new loan, the issue may be affordability as they have to assume you won't use the new loan to pay off the old one and the cc, thus you will be servicing all three for the next few years.

Affordability wise I will be paying slightly less monthly albeit extended by a year...

Not too sure, seems like a good idea in my head but I'm sure I've missed something obvious.

[sidicks]

crazy about cars said:

Affordability wise I will be paying slightly less monthly albeit extended by a year...

Not too sure, seems like a good idea in my head but I'm sure I've missed something obvious.

Are you sure you're not going to be paying more interest overall, by paying over a longer time period?

If you can give us the relevant figures we can help work that out for you to endsure that this does all make sense from your perspective!

Sidicks

[essayer]

Do you promise to cancel your credit card and never get another one?

[Simpo Two]

I was talking to an ex-bank manager once. He described a loan extension 'like pulling a drowning man into shallower water - but further from the shore'. Quite nice I thought.

[sidicks]

Simpo Two said:

I was talking to an ex-bank manager once. He described a loan extension 'like pulling a drowning man into shallower water - but further from the shore'. Quite nice I thought.