Ok so yesterday I recieved one of those pre-approved for an additional $3700 to your personal loan letters from HSBC. I am in Canada, and last year i obtained a $5000 personal loan with HSBC, the APR was a ridiculous 29%, due to my limited knowledge of managing credit the loan officer at HSBC told me my credit score was 629 so thats why I got that rate. Anyways I obtained the loan and committed to a $355 monthly payment. Its down to just below $3000 now but I plan to pay it off in the next 3 months as I am clearing up my credit for an auto purchase within the next 3 months too.
Some important points:
I have a mastercard, $1000 limit with 0 balance
FICO is 670 as of DEC 2011. I will be checking again this month to see if the new 0 balance on my mastercard has boosted my FICO, the card was maxed before
I have a student loan, just under $10000 and i pay $120 monthly
Those are the three main items on my CR, all other accounts have been paid off and some old accounts I closed after paying off. Other accounts are just utilities like cable and cellphone, all those are up to date with 0 balance.
I look forward to making an auto purchase for 30k - 35k, my budget for the auto is $700 monthly thats exactly 20% of my net monthly, also I am looking to go no higher than 8% APR. I am hoping if I can payoff the $3000 at HSBC AND KEEP THE 0 - 10% utilization on the mastercard then my score may go up closer to the 700 goal?
The big question?
HSBC has offered me an additional $3700 to my loan. Now I am confused on whether to take this or decline it. One thing for sure is if they dont offer me a rate thats atleast half the 29% APR that I currently have with them then thats a big NO from me. If they do re-finace the loan at a better rate since my CR has gone up alot from the last time they gave me a loan, will it be smart to take the $3700 and use it towards my auto purchase? I would also like to negotiate a lower monthly payment with them, thats if and ONLY if my APR is lowered.
If I accept this loan my debt will be:
Mastercard $0 balanace
Student Loan $10000 and steadily dropping
HSBC $3000 current balance + $3700 newly approved, and maybe I can use that $3700 for my downpayment?
then an auto loan will be debt item number 4 added to my list.
what would you do?
