|   FM Home  |   FM Forum  |   FM News  |   FM Blog  |  

Go Back   Finance & Money Forums > Finance > Loans



FAQ Members List Calendar Search Today's Posts Mark Forums Read

Loans Discussions about loans and lending practices.

Reply
 
Thread Tools
  #1 (permalink)  
Old 09-21-2007, 09:29 PM
Junior Member
 
Join Date: Sep 2007
Posts: 1
Default Outrageous Credit Card interest: Need an unsecured loan

Hi all,

This is my first time registering with this forum but I thought I'd post this and get some feedback

I currently owe 5000pounds on my credit card and the interest rates are getting out of control. I fell into the trap of 0% APR for 9 months etc but I lost my job right as the interest was kicking in so I couldn't transfer my large balance and now they're charging me over 100pounds per month as my minimum payment which is causing me to go over my limit and making things even more difficult.

Since I got confirmation of a new job I am going to take out an unsecured loan with my bank at 8% fixed rate and pay off my credit card immediately It will take 3 years to effectively pay off my credit card but god knows how long if I get sucked into keeping my credit card and paying these outrageous interest charges that are nothing short of criminal. It seems at every turn there is interest, fees and charges.

What do you think of my strategy? I was originally going to transfer to yet another 0% APR card for 13 months but that will just compound the problem and it will take me so long to pay off the card. If I take out the loan it will take me 3 years with each payment around 150 pounds per month. On 5000pounds I'll be paying back 620pounds in interest over 3 years. I don't use my MBNA card for purchases so I think it's time to take this route and get it paid off for good before it cripples me.

Comments welcome thank you!
Reply With Quote
  #2 (permalink)  
Old 09-25-2007, 01:32 PM
brian's Avatar
Administrator
 
Join Date: Mar 2006
Posts: 811
Default Re: Outrageous Credit Card interest: Need an unsecured loan

Let me get this straight - you owe 5 grand on your credit card, so you're looking to take out an unsecured loan to pay off that debt outright at a lower rate of interest?

If so, I think you're definitely on the right track - the fact that you're paying off your credit card in full should be helpful to your credit rating, but more importantly, the fact that the loan repayment rate is lower should definitely help control the debt and make it easier to control.

Just ensure the card is fully paid, then consider destroying it - when someone feels their debt is coming under control, it's far too easy to feel complacent and start using your card again - compounding the debt issue.

If you're looking for sources of loans, Northern Rock and Alliance & Leicester apparently have some good unsecured loan rates, though I'm not sure if Northern Rock is in a position to lend at present.

Anyway, best of luck with it.
Reply With Quote
  #3 (permalink)  
Old 09-25-2007, 02:05 PM
Senior Member
 
Join Date: Sep 2007
Posts: 188
Default Re: Outrageous Credit Card interest: Need an unsecured loan

I think it is ok to take out the loan and pay-off your credit card with one payment especially if the interest which you will pay on your loan from your bank will be smaller then what the CC will charge you (most likely it will be).

Once you pay off your credit card make sure you will use your card in a smart way otherwise you could face the same situation again.

If you use your CC it is always a good idea to pay off your balance at the end of the month (or at least during the almost two months that many cards offer for repayment without charging interest).

I would also recommend to make purchases which you can afford and not to buy anything which will require more then three payments.

I would not recommend to get a loan from Northern Rock as their future is very uncertain. Most banks do not show any interest in 'saving' the bank. Stay away from it, there are plenty of other banks...shop around to get the best possible rate.
Reply With Quote
  #4 (permalink)  
Old 05-22-2008, 12:04 PM
Finance Market forums
 
Join Date: May 2008
Posts: 20
Default Re: Outrageous Credit Card interest: Need an unsecured loan

I think you're definitely on the right track,it is ok take out the loan and pay off your credit card.
Reply With Quote
  #5 (permalink)  
Old 05-19-2009, 02:08 PM
Junior Member
 
Join Date: May 2009
Posts: 2
Default Re: Outrageous Credit Card interest: Need an unsecured loan

Good idea - take out the loan and pay the balance off every month at a fixed rate. Id agree with Brian, cut up the card, don't use it or cancel the account. I have to deal with clients day on day who get themselves into a state once they've consolidated. Northern Rock is one of the best companies to go for at the moment. Forget what the Sun might say, their triple A rated and funded by government. Your money couldn't be any safer.
Reply With Quote
  #6 (permalink)  
Old 07-23-2010, 05:04 AM
Junior Member
 
Join Date: Jun 2010
Posts: 20
Default Re: Outrageous Credit Card interest: Need an unsecured loan

yes, in your situation, pay off the credit card is a better choice. and make sure you won't miss the loan payment. otherwise, it may get you into trouble again.
Reply With Quote
Reply

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Credit card fraud on the increase overseas Finance News Credit Cards 0 09-18-2007 02:00 PM
Wise credit card users could gain from card trick Finance News Credit Cards 0 09-18-2007 02:00 PM
Avoiding UK Credit Card Fees Some Tips SavingsFriend Credit Cards 0 08-09-2007 02:12 AM


All times are GMT +1. The time now is 09:37 PM.


Powered by vBulletin® Version 3.8.2
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.1.0

© 2005-2011 Finance Markets. All rights reserved  |  About  |  Disclaimer  |  Resources  |  XML Feed  |  Contact us