Should I take a personal loan to clear CC debt?

J

joesat9

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I have 15k cc debt. I currently repay between 1300-1500 per month with about 300-500 purchases each month. Should I take a personal loan to pay off this cc debt at a lower rate or does anyone have any other advice?

Thanks,
 
For starters, do you think it is wise to be making €300-€500 purchases per month with €15k outstanding?
 
CCOVICH said:
For starters, do you think it is wise to be making €300-€500 purchases per month with €15k outstanding?
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You are right. This is the first thing I have tried to slow down on. Normally happens as cash gets short towards end of month. I know that I need to address the reason for that too.
 
Stop the purchases immediately. Balance your monthly budget according to your salary even if this means paying off less each month. Try to find a credit card with 0% interest for six months on at least some of the debt. For the balance I'd advise you take out a personal loan which will not charge the same rate in interest as the credit card. Do a search on AAM as there are already a lot of threads on this topic. Good luck.
 
liteweight said:
Try to find a credit card with 0% interest for six months on at least some of the debt.
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Yes, if this is an option, by all means go for it, but if you have €15k of debt, I dn't know if anyone will be interested.

AIB Platiunum offer a €15k credit limit and 0% for 6 months on balance transfers, which would require payments of €2,500 per month to clear the balance in time to avoid interest.

Any chance you are a homeowner and could release equity through remortgaging over an appropriate period?
 
Thanks for the responses.
I will stop purchases on the cards.
I already have 3k of the 15k on a 2nd card (zero interest for 6 months).
Also, yes, I am a home owner and am considering switching to NIB LTV product as my LTV is low (22%). I was thinking of the option of topping up the mortgage when I switch and use excess to clear the cc debt.
I thought a personal loan would be cheaper to clear cc debt (in the long term) than using mortgage funds . Does that sound right?
 
joesat9 said:
I was thinking of the option of topping up the mortgage when I switch and use excess to clear the cc debt.
I thought a personal loan would be cheaper to clear cc debt (in the long term) than using mortgage funds . Does that sound right?
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No, not always. If you remortgage at rates of 3-4% over a term of say 3 years, it will be cheaper then using a personal loan at rates of 8%+.
 
My current mortgage has 17 years left to run. I was planning to switch with the same period of repayment i.e. 17 years. Are you suggesting a separate mortgage of 3 yrs? Sorry if I am misunderstanding you.

Thanks again.
 
You can usually set up two different terms i.e. 17 years for your remaining mortgage and, say, 3 years for the loan to clear the CC.

Both would be at mortgage rates though.
 
I wasn't aware of that. Thanks for the advice. I think this is the route I will take (plus spending within means).
 
joesat9 said:
Thanks for the responses.
I will stop purchases on the cards.
I already have 3k of the 15k on a 2nd card (zero interest for 6 months).
Also, yes, I am a home owner and am considering switching to NIB LTV product as my LTV is low (22%). I was thinking of the option of topping up the mortgage when I switch and use excess to clear the cc debt.
I thought a personal loan would be cheaper to clear cc debt (in the long term) than using mortgage funds . Does that sound right?
Click to expand...

Hey joesat9.

Just on a point of info regarding the NIB LTV product, AKAIK they will only offer top-ups for "home improvements", supported by invoices/receipts. So looking for additional funds to clear CC debts, etc would be a no-no there.

However, there may be a way out, as suggested here
 
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