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Advice required please...
MW84
Posts: 35 Forumite
from http://forums.moneysavingexpert.com/showthread.html?t=347771
but realised in wrong section. please reply in this new thread. cheers
just over £17000 worth of debt - 2 loans, credit card and a very large overdraft plus numerous other direct debits.
have a poor credit rating and live with parents and I am looking to put all my debts together and pay them off in one small sum; or so to speak, as the advert says...
..can anyone point me in the right direction
...much appreciated
but realised in wrong section. please reply in this new thread. cheers
just over £17000 worth of debt - 2 loans, credit card and a very large overdraft plus numerous other direct debits.
have a poor credit rating and live with parents and I am looking to put all my debts together and pay them off in one small sum; or so to speak, as the advert says...
..can anyone point me in the right direction
...much appreciated
0
Comments
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Don't do it unless you've exhausted all other options. You'll find few if any on this board in favour of consolidation loans, mainly because they cost a lot more in the end & it just frees up space on the credit card to start spending again.
Add to that your poor credit rating any loan you are offered will be at an APR of well over 20% so it will cost you a fortune.
There may also be early settlement penalties on your current loans.
Fill this in http://www.whatsthecost.com/snowball.aspx & it will show you what to pay off each of your debts to minimise interest & get them all paid off as quickly as possible.0 -
you need to post your full financial details, that is income , details of spending and full information about debts (amount, minimum monthly payments and APRs)
see this post for more details
http://forums.moneysavingexpert.com/showthread.html?t=1072800 -
* bump bump *😁0
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Hi MW84.... i'm pretty new here myself but welcome. I have a similar amount of debt and would have to say that consolidation is really not the answer to becoming debt free. If you do that you wont be paying anything off, merely shifting the debt & not dealing with WHY you got into the debt in the first place. This inevitably means that in a year or twos time you will find yourself in a far more serious financial situation. I had my eyes really opened to this since reading the forum.
If you are living with you parents then I should think that you are in a better position then most to be able to tackle your debt without consolidating. If you follow the link that clapton has just posted you will see how to do an SOA and from that you can get so much advice regarding the best way to tackle your debt.
Good luck.0 -
I can relate the the idea of not consolidating to clear debts. I did it twice and ended up more in debt than ever. It was only with the third time that I got a grip of how and why I was getting into debt that it worked for me. And I ended up paying of that loan over 3 years early by following the kind of advice that people here give (unfortunately I didn't know about this site while I was doing it).
good luck!Retired in 2015.
Moved to Ireland September 20170 -
mjdh1957 wrote:I can relate the the idea of not consolidating to clear debts. I did it twice and ended up more in debt than ever. It was only with the third time that I got a grip of how and why I was getting into debt that it worked for me. And I ended up paying of that loan over 3 years early by following the kind of advice that people here give (unfortunately I didn't know about this site while I was doing it).
good luck!
I wish I'd learnt the third time!! Took me a fourth time and virtually maxed out cards yet again to realise consolidating wasn't gonna work for me!!
If you decide to consolidate you have to be 150% certain that you won't ever spend again on your credit cards. You have to be completely and utterly sure you will CLOSE your credit card accounts AS SOON AS you get your loan and not keep any cards for "emergency" - the "emergency" card never stays that way.
Keep a spending diary - see where your money goes and then work out what to do to stop spending so much.working on clearing the clutterDo I want the stuff or the space?0 -
newlywed wrote:I wish I'd learnt the third time!! Took me a fourth time and virtually maxed out cards yet again to realise consolidating wasn't gonna work for me!!
If you decide to consolidate you have to be 150% certain that you won't ever spend again on your credit cards. You have to be completely and utterly sure you will CLOSE your credit card accounts AS SOON AS you get your loan and not keep any cards for "emergency" - the "emergency" card never stays that way.
Keep a spending diary - see where your money goes and then work out what to do to stop spending so much.
thats what I am planning to do. think i've matured since taking previous loans out and realised that I REALLY need to watch my spending. Have been over the last 2 weeks, but with it being Christmas and pay day not coming for a while its made me realise how much debt I am in.
I'm not bothered about paying a "high" interest rate as long as the payments are affordable to me and means I can get all the other debts paid off ASAP. Only problem being my work salary a YEAR is well below what I owe :eek:
So reckon I might struggle to get a consolidation loan but any links to such companies (if they exist for non homeowners) or where to look would be helpful!! I am gonna read through threads already posted and see what they say and then post up information regards my debts. think it will give people a shock really, me and included.
Cheers,0 -
If you're absolutely certain you can get out of the trap of overspending then consolidation might work.
I'd advise you to cut up your credit cards while you're doing it so you can't be tempted to use them. Get a loan that allows you to make overpayments without penalty, then make a plan to pay if off early (this saves huge amounts of interest). I had an Egg loan at a rate of about 6% APR (rates were low then) and overpaid £3000 a year for the last three years of the loan. There's lots of advice on here about reducing outgoings, and if you're living at home with parents that should be easier.
Avoid any company that advertises on daytime TV. Try your own bank first, they might surprise you as they could want to keep you paying them rather than someone else. Always look at the APR.
Good luck!Retired in 2015.
Moved to Ireland September 20170 -
MW84 wrote:thats what I am planning to do. think i've matured since taking previous loans out and realised that I REALLY need to watch my spending.
Please, think REALLY carefully about this. The number of times I said what you are saying - and I meant it at the time! It's just like listening to myself - I consolidated a couple of times and it was the worst thing I have ever done. I started off with a tiny amount of debt, but taking out my first consolidation loan, cos i wanted a manageable straighforward payment each month, led me down the path I'm now on. I'm starting to try to get to grips with things, but I've realised I am never going to be mature with money. I'm far better than I was (sleepless nights, depression, panic attacks etc have taken the sparkle off girly shopping trips) but I know that spending is my vice and I have to be careful.
While you're living with your folks you're in a great position to blitz your debts - I only had a year at home after my lightbulb moment and wish I'd have had longer (but naughty hubby came along and made me marry him and buy a house). We're pulling along together now and it's going to take a long long time to sort - and I still have my "moments" (the Next directory is like !!!!!! for me :rotfl: ).
If you can, take the tough route of paying off all you can each month and get into the habit of not spending on non essentials.
Good Luck - and I hope you managed to find a solution to your problem.0 -
Cheers for advice guys and gals, in process of putting all my income and expenditure together. seriousally not gonna make good reading at all.
is there loan companies out there for example who would give a bad credit rated person a consolidation loan who lives at home and earns £12000 whilst his debts rack up to £17000? surely not!
I do not think my own bank (Barclays) offer loans of anything over £15000.
On my online banking they have a pre-approved offer of £800 for a loan (quite poor) however I realise there is no point in taking this. Tempting to take it and sort things out for this month but then what? What I am trying to say is surely if I only have a pre-approved offer of £800 for my own bank surely no chance of getting £17000 elsewhere? Luckily have not applied elsewhere for a while so might keep me in good stead.
What I am hoping to do is get a rate which is affordable to me!0
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