Short term finance - idea's

M

monk

Guest
Unfortunately, I've managed to run up a bit of debt on the credit cards - approx 5000 - and both of these cards have now passed the 6-month intro rates. Normally I don't leave balances on the cards but the car insurance/tax and a Sept holiday hit the cards. I'm looking for the most efficient way of clearing this debt at lowest cost. I will be able to clear this in approx. 7-8 months.

My thoughts are to get one of the UB Zinc cards (or a 0% balance transfer card, but I believe the UB card will automatically have a limit above 5k others mightn't - currently have MBNA & BOI Master) and transfer the balances onto it. Should get the bulk of the balance down within the 6 month period so pay minimal interest. The other option is to get a bank loan (I am not in a credit union anymore) for 5k and try to get the term under 1 yr. I don't know if BOI will allow this, as per 'best buys' the terms were longer for this amount. Haven't got a bank loan in about 7 years(since my first car, good old rust bucket Micra which never gave me any problems) but they do send me out letters every now and then pre-approving me, I've just never studied the details.

Why I'm thinking about is if it will affect my applying for a mortgage. I currently have approval in principal but that was with no 5k loans or cc's balances and I don't want the approval amount to be reduced down as its stretching my house hunting enough..
 
M

monk

Guest
don't think it qualifies as dire strait's (I hope) just looking for good ideas for a short term problem....
 
N

nogser

Guest
Monk

From my reading of posts it seems that Loans will affect the amount of money you can borrow. It might not affect your current approval but would affect others if you found a better deal. Credit cards on the other hand appear to be ignored. So berhaps staying with the CC is the safer option from that point of view. Best to put that card away and pay it off before the mortgage starts.

Nogser
 
S

shoegirl

Guest
Hmm...

So you went and blew €5000 on your credit cards over 6 months and now you go and take out a mortgage as well? Sounds like you have a borrowing/spending habit to me?

Your only solution that will not affect the mortgage is to destroy the cards or put them away and start to pay them off. Count yourself lucky as many people are not in as fortunate a situation as you are and are screwed with large consumer debts and may never be able to get a mortgage.
 
M

monk

Guest
Re: Hmm...

Shoegirl, don't hold back tell it like it is!!

Didn't run it up over 6 months. It only took a 3 week period to rack it up, bold bold boy...
I don't agree totally with the route of cutting up the cards and slaving away paying high interest rates telling yourself you've been very naughty. Moving your debt into the most cost-efficient product option and managing the debt can often be more productive.
So I've now got 3 credit cards, but haven't put any more debt onto them and have knocked 1k off the o/s on the new UB card paying lower interest. If I could I would postpone Christmas for 6 months(its crazy, if you actually write down what you spend over Christmas its astounding -between parties, presents even just catching up with friends for a couple of pints on Mon/Tue/Wed/Thu not to mention the weekends) but we'll struggle on.
Now off I go to my DA(Debtors Anon) meeting to deal with my habit
 
S

Skinflint

Guest
.

Moving your debt into the most cost-efficient product option and managing the debt can often be more productive.
I personally reckon that using 0% or low interest CC introductory offers to manage outstanding debt is not a good idea for most people. Bear in mind that many such offers will credit any repayments off the transferred balance first meaning that new transactions will be charged at the usual exhorbitant rates (15%-20%). Anybody using this approach to debt management would want to be very careful. Unfortuntely, most people who have previously run up significant CC debts are unlikely to have the discipline or knowledge to act in this way.
 
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