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Consolidating Loans

  • 10-05-2010 1:16pm
    #1
    malkmoose
    Registered Users, Registered Users 2 Posts: 98 ✭✭


    Does anyone know the rules around consolidating a personal loan into my mortgage? I have a fixed rate mortgage for the next 3 years, my mortgage is more than the value of the house unfortunately. I had a look on its your money about it but they do not go into the specifics of what criteria I need to meet.
    Can it be done on a fixed rate mortgage?


Comments

  • #2
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    It can be done even if you have a fixed rate on your existing mortgage, as the top up is treated as a separate loan. That's where the good news ends I'm afraid.

    As you are currently in negative equity (mortgage > than house value) your bank is highly unlikely to offer a mortgage top up.


    You might be able to consolidate your personal loans into a more manageable or better interest loan.

    Consider getting a loan to clear credit card (then cut it up) or a term loan may make sense if you have a number of loans payable over different terms.

    For example - Say you've a loan for €10k and another with €1k left on it with €250 monthly payments each. You'll be paying €500 off these loans over the next number of months but if you consolidate them you'd reduce your cash outflow in the short term but increase it somewhat over the long term.


  • #3
    malkmoose
    Registered Users, Registered Users 2 Posts: 98 ✭✭malkmoose


    OK. Thanks for the info, it is a credit union loan for 15K so the interest rate is quite favorable already, credit card is not an issue thankfully. My main reason as you say is to increase my cash flow.
    I suppose my options are:
    - extend the term of the loan with the credit union
    - shop around for a better interest rate
    - chance my arm with my mortgage provider and I hope I catch them on a good day.


  • #4
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    tomasdebrun wrote: »
    OK. Thanks for the info, it is a credit union loan for 15K so the interest rate is quite favorable already, credit card is not an issue thankfully. My main reason as you say is to increase my cash flow.
    I suppose my options are:
    - extend the term of the loan with the credit union
    - shop around for a better interest rate
    - chance my arm with my mortgage provider and I hope I catch them on a good day.

    Hi would suggest you combine option 1 and 2 to see the best you can do. Credit union may still be your best bet and they would probably look favourably on extending loan term - especially back up to the original loan term on current loan.


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