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to consolidate or not to consolidate??
tlc123_2
Posts: 161 Forumite
Hi everyone
I am in the process of doing an SOA, but have done a budget planner so do know pretty much where I'm at. As I said, I have about £35,000 of debt, to one credit card, an overdraft (which is currently double its limit so I'm being charged £150 a month every month) and the rest are personal loans.
I'm lucky enough that even though the debt is huge (does anyone exist with debt bigger than this?!) we can afford to pay it. We don't have much left over but we manage. I've just taken a second job as a Helen-E make up consultant doing parties at home, which brings in good money - if people don't keep cancelling!!
We are hoping to consolidate as at the moment we have debts coming out left right and centre and as I get paid monthly and my fiancee gets paid weekly it's hard to follow were we're at. Therefore we'd like to have one payment that's easier to track.
Brief research shows that if we got a decent APR we could save over £100 per month by consolidating - nevermind the fact that we'd get rid of the bank charges.
As the debt is over £25k we don't have the option of an unsecured loan, it would have to be secured. People seem massively against these. Am I better finding a reputable secured loan, or maybe two personal loans?
I guess our point is secured loans are only a problem if you default on your payments? Which we are lucky enough to be unlikely to do.
Help please! I don't know what to do for the best
TLC x
I am in the process of doing an SOA, but have done a budget planner so do know pretty much where I'm at. As I said, I have about £35,000 of debt, to one credit card, an overdraft (which is currently double its limit so I'm being charged £150 a month every month) and the rest are personal loans.
I'm lucky enough that even though the debt is huge (does anyone exist with debt bigger than this?!) we can afford to pay it. We don't have much left over but we manage. I've just taken a second job as a Helen-E make up consultant doing parties at home, which brings in good money - if people don't keep cancelling!!
We are hoping to consolidate as at the moment we have debts coming out left right and centre and as I get paid monthly and my fiancee gets paid weekly it's hard to follow were we're at. Therefore we'd like to have one payment that's easier to track.
Brief research shows that if we got a decent APR we could save over £100 per month by consolidating - nevermind the fact that we'd get rid of the bank charges.
As the debt is over £25k we don't have the option of an unsecured loan, it would have to be secured. People seem massively against these. Am I better finding a reputable secured loan, or maybe two personal loans?
I guess our point is secured loans are only a problem if you default on your payments? Which we are lucky enough to be unlikely to do.
Help please! I don't know what to do for the best
TLC x
Long Haul Supporter #203
:beer:
0
Comments
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Hi and welcome
The short answer to your consolidation query is that most on here are unlikely to think it a good idea. It can work for a very small number of people but this is rare. Until we can get a full picture of your situation, we are unable to advise.
Time to post a SOA. Fill it in at www.makesenseofcards.com and post it here. You will then be able to get lots of advice
NB. the major reasons for us usually saying no to consolidation:
1. you may start off being able to afford it but what if you lose your job, your health, your circumstances change in some other way beyond your control and your income changes?
2. You will subconciously feel you have 'solved' your debt problem and the temptation to spend the extra will be back, leading to an even greater debt very soon
3. It is hugely more expensive overall and will take you years extra0 -
Hi and welcome
I think you have answered your own question..you have taken out personal loans that you cannot afford and you are now thinking of taking on another one to cancel them out thus compounding the debt even more. If you post an SOA as Topcat has suggested then we can see your incomings and outgoings and suggest ways to reduce your spends thus freeing up money to chuck at your debts. I would also suggest that you start keeping a spending diary so you can see where money is being frittered away e.g. lunches at work, coffees out, snacks, newspapers etc.Semper in faeces profundum variat
Make £5 a day challenge Oct 2014 £126.00/£155
Make £5 a day challenge Nov 2014 £157.40/£150
Make £10 a day challenge Dec 2014 £392.90/£3100 -
I guess our point is secured loans are only a problem if you default on your payments? Which we are lucky enough to be unlikely to do.
TLC x
You cannot know this for certain!
It is very dangerous to convert unsecured debt to secured.
If you ever need help from the government's saftey net (Support for Mortgage Interest) then they will not pay the interest on the element of the mortgage/secured loan that was used for debt consolidation. Also, the fact that your secured borrowing has increased means that your contractual monthly instalment on the secured borrowing will be higher and so you are more likely to get into trouble in the first place.
I agree with the others - post a SOA and let's see if we can work out the best strategy for you.0 -
Thanks for your comments. I have taken them on board and won't be going with a secured loan. I can't seem to attach anything so can't put my soa on here. Will do a new thread tomorrow with my soa written out onto here direct. Thanks again
TLCLong Haul Supporter #203:beer:0 -
Hi TLC
To post you SOA you just need to remove the web address at the bottom of the SOA, then you should be able to post the rest.A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0
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