In May 2006 I wrote about how I’d paid off a significant personal loan that I’d had for quite a while (Loan Shmoan).  We got that loan because of a broad range of circumstances, and it really kept us afloat at the time, but paying it off was a pretty good feeling.

Three months later in August 2006, I wrote a post about how our credit card bill was still not going down quickly enough and that I was thinking of taking out another loan to get rid of it (Loan Moan).  We didn’t take out a loan at that time, we just tried hard to keep the credit card balance under control, and mostly we did.

It just stayed static (mostly), and it remained that way until the early part of this year.  Every now and then I would check and see how much interest we were paying on the balance and what the minimum payments were, and think about a loan, but it seemed like accepting defeat.  We weren’t buying anything big on the card, but a few small things here and there (literally £10 and £20 stuff) that wouldn’t get paid off and would mount up.  In the early part of this year we finally started making some progress on the balance and it was less each month, which is the first time that had happened for ages.

And then, in the middle part of this year we had a run of bad timing.  Car troubles, road tax, various other bits and pieces, and suddenly before you know it the balance is higher than it’s been for a long time.

I could pay it off over time, I could stop using the card, set up a direct debit covering the minimum payment + whatever I feel I can afford and the balance would eventually go away.  But the interest rate on the CC balance is significant (it’s not terrible, it’s a reasonable card, but it’s clearly higher than you can get with a personal loan).

So defeat or not, it finally made sense to take out another loan, clear the card down to a zero balance and start fresh.  Once the cash arrives I’ll set up a ‘pay off the full balance of this card’ standing order with the bank ((I know I should have done this last time, but I still have this weird concern that I need to micro-manage everything in my bank account, but it’s clear I’m not strong enough to actually do that)).  The payment on the loan is only 50% higher than the minimum payment was on the CC balance, and the loan repayment is four years.  So every month I know I’m better off than I was the month before and there’ll be no sudden increases.

I arranged the loan over the phone with my bank,  and despite the fact that I knew they’d give me the money, the conversation still made me feel nervous like I was being grilled and that I could somehow fail to meet their expectations.

So anyway, here we are again, September 2010, with a personal loan.  Hopefully, some time in 2014 I’ll be back blogging about how it’s paid off and how happy I am about it.

The key will be whether I’m back again three months after that saying the CC balance is out of control – let’s hope not.