Loan to pay off O/D

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missie25

Guest
OK this how it is:

I have 2 large overdrafts and a credit card balance....

Should I just get a loan and pay them off that way as I am struggling to pay them off any other way...I can then pay the loan in installments every month with out the mess?

Would I be caught out for interest? Is the interest charged on a loan bigger?
 
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Elcato

Guest
The Credit union would be cheaper to get a loan if you are a member. Work out the total owed. Check out how much you can pay a week and go from there. Check out the interest rate on each and pay the highest rate loan first but balance out the fact of how much is owing. Chances are the CC is the highest interest.
 
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Skinflint

Guest
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If borrowing at a lower rate to cover the cost of your outstanding high rate loans/credit card balance is the way to go then you should consider this a once off chance to restructure your finances so that they are mnore manageable and your should also seriously consider cutting up the credit card to avoid further temptation. Have a look at the AAM guide, www.mabs.ie and www.fool.co.uk/debt/debt.htm?ref=leftnav for more tips on dealing with debt.
 
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missie25

Guest
Re: .

Ok thanks for that.


I will consolidate my debts so I can pay them off within six months.

Has anyone any idea of the best rates for personal loans..
Credit Union has quoted me 8.3%....are there any better out there??

All feedback welcome...
 
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monk

Guest
Re: .

Missie,

If you think you will be able to clear the debt within 6 months, then one of the credit cards with an introductory offer would charge the lowest interest. I'm in a similar situation and have just consolidated all my debts onto a new Ulster Zinc card (1.9%APR balance transfers & purchases for 6months)
 
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missie25

Guest
Re: .

Thanks for info.. but why the Zinc card?

For Ulster Zinc ,your salary would have to qualify as €30,000. I see that the same conditions are for Visa with Ulster bank but without the minimum €30,000 salary requirement.

Am I right??

Yeah it sounds like a good option instead of paying a higher interest rate in a credit union...
 
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monk

Guest
Re: .

I went for the Zinc as the minimum they'd give you was 5000 (which is how much I wanted), thought other cards mightn't have given that much straight away. Whatever card you think will work for you...
 
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Skinflint

Guest
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Do you mean a €5,000 credit limit? To my mind somebody who is trying to use a credit card 0% introductory offer in order to consolidate/transfer more expensive loans so that they are less expensive is treading on thin ice by having the temptation of further credit available. While transferring outstanding debts in this way may work for some people I reckon that, in general, many people could end up in worse debt if they're not careful!
 
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missie25

Guest
Re: .

Well I am paying off €3000.
If I cut off my current credit card and close my O/D then there should be no temptation...
I just want to pay the lowest rate possible so this seems the better solution

8.3% v 1.9% .......
 
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Elcato

Guest
Re: .

Bear in mind also that it will cost you €40 to close one and open the other.
 
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missie25

Guest
Re: .

So is it too risky then to borrow on a credit card??
 
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Skinflint

Guest
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I personally think that anybody who has already incurred significant high interest rate debts (e.g. personal loans, credit card balances etc.) is not taking a prudent approach to dealing with this debt by transferring it to a new credit card possibly with a 0% or low interest rate intro period and might be better advised to follow some of the tips at www.mabs.ie/debt.htm or www.fool.co.uk/debt/debt.htm for example. That's just my view though.
 
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monk

Guest
Re: .

Personally I was just caught on the hop in Sep/Oct with the cc having to be used on a holiday/car ins./tax and a E900 car repair bill. Once you are determined to clear the outstandings within 6 months and not incurring new debt with your extra credit then transferring to a low interest facility is a cost saving step. The E40 incurred is more than offset by the interest payments saved moving from the high APR of normal cc's.

I wouldn't say its too risky to borrow on a credit card, as with any debt you have to make sure you can service it. See the links provided above by Skinflint for tips.
 
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daltonr

Guest
Re: .

I personally think that anybody who has already incurred significant high interest rate debts (e.g. personal loans, credit card balances etc.) is not taking a prudent approach to dealing with this debt by transferring it to a new credit card possibly with a 0%
This is true to a point, but I wouldn't make it a hard and fast rule. The key issue is whether the things that created the debt have been addressed. If they have, and the debt can be cleared in the 6 months, then the 0% rate is fine. If they haven't then even a very low rate loan or (heaven forbid) a remortgage won't help, it'll just slide you in deeper without you noticing.

If we are talking about a debt that can be cleared in 6 months then it's small, it's either someone who got caught by surprise, or someone who has caught themselves very early.

Go with the 0% card, The repayments are flexible, and the rate can't be beaten. Credit Cards used wisely are great, take it from a reformed abuser.

-Rd
 
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missie25

Guest
I applied for a bank of ireland advantage card to transfer my o/d balances and credit card balance on to this card.
The card is 2.9% on balance transfers for the year. I think this better than taking a loan out at 8.9%. I estimate that I will have the loan paid off in 6 months time.

I know it 's silly to ask but how do I go about transferring my balance? Is it acceptable to use a credit card as a loan facility because in essence that is what I will be doing!
 
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rainyday

Guest
I know it 's silly to ask but how do I go about transferring my balance?
They will probably send you out a balance transfer form with your new card. If not, just give them a ring.

Put a note in your diary for five months out from the date of receipt of the new card. If you haven't cleared the amount by then, make sure you make some other arrangement - as the interest charges from the sixth month onwards will be punative.
 
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Skinflint

Guest
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Bear in mind (as reiterated by Niall Brady in yesterday's Tribune) that many of these 0% or low rate credit card balance transfer offers only charge 0% on the transferred balance but normal rates (up to c. 20% APR) on purchase AND all repayments are credited against any outstanding balance (e.g. the transferred balance) thus meaning that any new transactions effectively automatically attract penal interest charges!
 
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shoegirl

Guest
Credit card transfers

Beware of transferring credit cards, they hugely increase your risk of ending up in debt unless you maintain the same credit limit and close the original card.

If you speak to many consumer debt expert they will all tell you that this is a dangerous move towards a serious debt problem.

My trick is to place the card in a bowl of water, stick it in the freezer, and stop spending. Thats the only way to clear a credit card debt. A reduction of a couple of percent translate into quite a small saving, one that will be offset if you continue to use the original card and/or a second card with bigger limit.
 
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