Published 24 December 2016 · Last reviewed 25 February 2017 · Older article — see current rates
Want a Remortgage or loan to Pay off credit cards but have had credit problems
The excesses of Christmas affect almost everyone and running up debts on credit cards is all too easy so its best to start thinking about how you can Pay off credit cards. The trouble with credit cards these days is the purchase rates and promotional periods are often not that good. Transferring cards incurs costs and in many ways just kicks the problem down the line so a remortgage or secured loan might be a solution for you.
For many personal loans can be hard to obtain as the credit scores are tough as the providers use super warehouses like MoneySupermarket and Compare the Market to attract bucket loads of customers and they take the cream at the top, however, there may be a viable alternative even if you have had credit problems in the past in the form of a remortgage or secured loan.
As the debt is secured against your property the lender has more come back in the event of non-payment as such they may be more willing to take on customers with a poor credit profile. At Niche Advice we have helped clients all down the credit spectrum consolidate debts into one more manageable monthly payment. That’s right even applicants with missed payments, CCJs, defaults and historic bankruptcies.
Importantly, before you make a judgement on whether to transfer unsecured debt you should consider the following:
- The re-negotiation with existing creditors to Pay off credit cards.
- Securing debt will put your property at risk if you do not keep up repayments.
- It is likely that by securing your debt that overall you cost will be higher as you are likely to be borrowing (paying interest) over a longer period.
- You seek professional advice from a professional debt consolidation mortgage broker such as Niche Advice.
Example Product – Debt Consolidation Remortgage to Pay off credit cards (Residential)
Initial Rate: 1.39% Subsequent: 3.74% The overall cost for comparison 3.43%% APRC
Features: Remortgage to clear your credit cards and personal loans. Free basic legal service.
You are consolidating your existing financial commitments, you should therefore be aware that whilst this may mean you will make short term savings, over the long term, you may end up paying more. This is because you may be extending the period of the loan. You are also transferring previously unsecured debts to a mortgage which is secured on your home. The reason you want to consolidate your existing debts is to reduce your monthly outgoings.
Please also be made aware Lenders tend not to look favourably on applicants that have a repeated history of debt consolidation so future finance for this reason may be hard to obtain.
Important Information
Residential and Buy to Let Mortgages
Rates current as at 22/12/16 . The overall cost for comparison is based on a purchase price of £300,000 over a 25 year term. The Right-to-Buy example is based on a discounted purchase price of £150,000. Repayment for Residential and Interest only for Buy-to-let (unless otherwise specified). Eligibilty will depend on your own personal circumstances.
KEY – ERC = Main early repayment charge.
The purpose of this web is for information only and is based on a fictitious illustrative scenario. It does not constitute a Mortgage Offer in any way.
It is essential that you seek independent mortgage advice as a suitable product will be based on your own individual circumstances. An interest rate should not be read in isolation, and you should refer to your personal key facts illustration and Mortgage Offers for full terms and conditions. If anything is unclear it should be discussed fully with both your mortgage and legal advisors before entering into a mortgage contract with the lender.
The information contained herein is based on research through the Trigold (IRESS UK) sourcing system. When first published to this site the data is normally 24 hours behind real time, and may or may not still be available.
A first charge over your property is required as security for the loan.
The formal mortgage offer of an advance will be subject to a valuation and other satisfactory references.