repay a loan in one go

[Abbica]

Hi, can I ask, I have a credit union loan amonst others and we want to cosolidate all our loans into one so, put it all into a halifax loan, clear credit card extra. If I have a loan with a bank and say I want to pay it off all of a sudden, clear the debt, will they penalise me for doing this or would I be better for staying with the credit union?

 

[CCOVICH]

Depends on the terms attaching to the loan-fixed rate loans generally carry a penalty for early repayment, but not in all cases.

In relation to Credit Union loans, I don't think that there is any penalty involved in repaying the loan earlier.

I'm not aware of all the facts, but it would strike me as odd to move a loan from a Credit Union to Halifax.

 

[Abbica]

It is just that we have loans all over the place and I just wanted to pay a few off so we can just have one loan to pay to with low interest. I am paying 11.9% on my credit card and then the credit union, it is now 7.99%. I rang up halifax, she told me, get out a loan for €25,000 so I will now get the cheapest APR at 7.5% and just pay it off over 5 years,so I will pay €20,000 back to the credit union and clear our €4,000 credit card, etc and then take out my personal loan of €25,000 and then my repayments are a bit better and easier to mange. Am I doing this right

 

[Smashbox]

Check with the CU that you wont have to pay any fees for paying off your loan early. I have consolidated in the past, and everything was fine. All you need to do really is sit down and address your situation.

 

[CCOVICH]

Am I doing this right

Paying off a credit card balance over 5 years isn't necessarily a great idea.

If you can clear your credit card in (say) 3 months @ 11.9% interest vs. paying for the balance over 5 years @ 7.5%, you will save yourself a lot of money (assuming you limit your credit card use in that time). You could perhaps ask the CU to lower or suspend your monthly repayments while you address your credit card balance?

Are you struggling to meet your monthly commitments due to the cost, or is it just that you find you are losing track of your various loans?

 

[Abbica]

I wouldn't say we are struggling, it is just that we have no social life as we are paying off quite a few loans but not living on beans if you know what I mean.

We have our own personal accounts and I have my car loan etc in mine, train ticket, etc which I am paying off myself and the same for my husband, he looks after his own affairs. All in all, we deal with Credit Union, PTSB, BOI, halifax for our joint account, IIB mortage, Hibernian for insurance. You would go mad keeping track, so I thought, pay off the credit card instead of paying huge interest and just pay off over 5 years on the low interest and clear our credit union loan also,(which I won't be penalised for).I would rather just pay these two off in bulk at that rate, I think, as it makes sense to me, but will Halifax penalise me if I pay them off with a bulk sum in future say?

 

[CCOVICH]

I would rather just pay these two off in bulk at that rate, I think, as it makes sense to me, but will Halifax penalise me if I pay them off with a bulk sum in future say?

In relation to the first point on the credit card, a lower rate + longer term = more interest.

On the second point, it depends, if it is a fixed rate loan, then I would say (in general) yes, but it depends on the terms and conditions of the specific loan.

While it may appear to be a quick fix to consolidate all your loans/debts and pay them off over 5 years, a bit of careful thought and budgeting now might save you more money-I'd be inclined to tackle the credit card first if possible.