Debt consolidation loan.

axelfoley666
axelfoley666 Posts: 1 Newbie
in Loans
It seems a catch 22. Refused a debt consolidation loan due to amount of debt but said debt will not be there once you get a debt consolidation loan. How do you get around this? Just want all my eggs in 1 basket and lower my overall monthly outgoing.

Comments

  • Ebe_Scrooge
    Ebe_Scrooge Posts: 7,320 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    You get around this by better budgeting, reducing outgoings and/or increasing income - the DFW board is a great place to start.


    Consolidation loans are rarely a good idea. For starters, the lender has no guarantee that you'll use the loan to pay off your debt - for all they know, you could use the loan to splash out on an exotic holiday, and end up with twice the debt.


    And even if you do manage to get a loan, that doesn't tackle the root cause of the problem. All to often, the debt just piles up again.


    You need to tackle the cause of the debt rather than just putting a sticking plaster on the symptoms. Head over to the DFW board, fill out an SOA, and the friendly folk there will be able to help you.
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
    First Anniversary Name Dropper First Post
    Whats your income and total debt?

    Do you have any equity in your property?

    Forget the idea that it will be all ok if you consolidate your debt, as if you where approved for a consolidation loan it will end up costing you more and you wouldn't of addressed the cause of the debt.
  • B_G_B
    B_G_B Posts: 502 Forumite
    axelfoley666 wrote: »
    Refused a debt consolidation loan due to amount of debt but said debt will not be there once you get a debt consolidation loan.

    And there lies a major flaw in your rationale.
  • System
    System Posts: 178,093 Community Admin
    Photogenic Name Dropper First Post
    axelfoley666 wrote: »
    It seems a catch 22. Refused a debt consolidation loan due to amount of debt but said debt will not be there once you get a debt consolidation loan.

    Yes it will, you'll just owe a different company. You're clearly up to your eyeballs as you're failing affordability tests and companies are reluctant to loan for debt consolidation because of the number of people who then re-spend on their cleared cards and end up in a DMP anyway.

    Order your debts in interest percentage, pay minimum on them all and put as much as you can in paying off the highest interest rate borrowing first. Once that is cleared move on to the next.

    There is no quick way out of the hole you've dug yourself.
  • Sncjw
    Sncjw Posts: 3,505 Forumite
    First Anniversary Name Dropper First Post
    You been refused because it!!!8217;s double to debt you have now. Until you pay it off it will be double and that!!!8217;s what the bank will see. They will determine if you can pay the costs of double the debt
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

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