take loan to pay cc or not.

C

catchphrase

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Hi, My credit card bill is at present 5000euro, I am currently only able to pay off about 200 e per month. my interest rate on the cc is approx 12.78 percent.
I applied for a loan of 4000 over 2 years and i was approved. The total amount that would have to be repaid is 4800 aprox. The interest rate is 13.8 approx. My question is , is it a good idea to take the loan to pay the bulk of the credit card, or am i better off to just keep paying what I can off my credit card and not take the loan.

appreciate your feedback.

Ps I am expecting aprox 10k from a redundancy claim, however this is going to take cira 8months.

Thanks a mil
 
If the interest rate on the loan is greater than the rate on the cc, it makes no sense to me to take out a loan.

You certainly need to cut up the credit card or freeze it in a block of ice in the fridge for emergencies.

You need to be VERy disciplined in paying it off.
Good Luck
 
Thanks Mommah, with the cc would i not be paying interest on interest? Would it not work cheaper to pay off cc and have loan 2 years.

thanks again
 
If you can afford to repay the higher interest loan over 2 years, you can afford to repay the lower interest cc over the same period, provided you don't run up any more debts on it. If your cc is not over the limit and you are not incurring extra charges for that, it makes no sense to take out this loan.
 
thanks greta,

no the cc has a 10k limit, only reason we have such an amount on it was because my husband hasnt been paid wages owed over the last 4 months, so we have had to use the cc to survive, hence he is been made redundant end of month and we are now on jb. we dont have any other loans or cc and i thought it made sence to have a loan rather than cc, but thanks for the info i see its better to just keep paying cc. cheers
 
Just make sure you are comparing apples and apples.

Is that annual interest rate the AER (used to be APR)?

Usually cc interest rates are higher than loan interest rates.
 
catchphrase said:
Hi, My credit card bill is at present 5000euro, I am currently only able to pay off about 200 e per month. my interest rate on the cc is approx 12.78 percent.
I applied for a loan of 4000 over 2 years and i was approved. The total amount that would have to be repaid is 4800 aprox. The interest rate is 13.8 approx. My question is , is it a good idea to take the loan to pay the bulk of the credit card, or am i better off to just keep paying what I can off my credit card and not take the loan.

appreciate your feedback.

Ps I am expecting aprox 10k from a redundancy claim, however this is going to take cira 8months.

Thanks a mil
Click to expand...

If you take the loan,and are repaying 4800 over 2yrs thats 200/month
Keeping up to date with 1000 still outstanding on your CC, will cost at least 25-30/ month.
So total repayments of 225/230 month
 
catchphrase said:
My credit card bill is at present 5000euro, I am currently only able to pay off about 200 e per month. my interest rate on the cc is approx 12.78 percent.
I applied for a loan of 4000 over 2 years and i was approved. l
Click to expand...

How on earth did you get approved for a loan if you can only pay off 200 on our credit card? And both of you are on JB?

Is there a penalty clause in the loan if you pay it off early, such as when your get the redundancy? You need to factor in all costs to credit in order to make a comparision between the credit card debt and a loan.
 
hi bronte, sorry should have made clearer, he has just gone on JSb and wasnt on it when applying for loan, only week in difference, he was told that day he was going to be let go. we dont have any other loans and have a v good credit rating apart from the last 4 months due to getting no wages we had to use the credit card. we rang and explained to bank that we were due the wages at the time and were just waiting them to be paid, i thought id be better clearing card and having loan...but have learned now its not.anyway in the meantime my husbands employer has coughed up some of his wages and we have been able to clear a good portion of cc and didnt need loan and am glad we dont have it now!!!
 
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