Help Re Debt Consolidation

glasgowc · 3 February 2005 at 9:59AM

Morning Dudes

Im currently looking into consolidating my car loan and 2 credit cards.

My car loan has a settlement figure just now of £3900

im currently paying it back at £104 a month over 5 years, im about a year into it. I believe the rate is 5.5%

i have 2 0% credit cards

sainsburys - £2300
Cap 1 - £500

Both cards are at their limit just now and im only paying the minimum.

Now I know you may think im daft wanting to put 2 0% cards onto a loan but i really think it would help me just to have one payment coming out a month.

I also have my car insuance due next month this will be £1000 for the year. I cant afford it so would like to put that on the loan as well so I can get everything sorted and start off fresh so to speak.

any advice would be much appreciated.

Debt_Free_Chick · 3 February 2005 at 10:39AM

Now I know you may think im daft wanting to put 2 0% cards onto a loan but i really think it would help me just to have one payment coming out a month.

Yep, I do think yer daft ;-) At the moment, you only have to repay £2,800 to clear those two cards. If you put those on a loan, you'd have to pay more than £2,800. Let's call it £3,000 (but it could be much, much more!). Now why on earth do want to chuck £200 at a lender, for nothing? If you've got £200, I'll take it off your hands ;-)

A single payment seems better, but it's really no different. Do you buy everything in one shop and make a single payment? nope ... so do try to get your head around this.

Your loan is also at a good low rate. I don't think you'll get a better one at the moment, so I'd be inclined to leave that one alone too.

Have you looked at all your bills and go the best rates for utilities, mobiles etc? And could you cut out some spending for a while? Try to free up more money each month and get on with paying those cards off.

When do the 0% periods end (month & date). You want to try & keep that debt at 0% until it's paid off and you may need to shuffle around a little. Post the end dates and we'll make some suggestions.

HTH

Malestrom · 3 February 2005 at 6:44PM

You seem to be panicking because your car insurance is due and you have no money to pay it, rather than because you have some debts? Can you not afford to pay your insurance monthly rather than in one lump sum? If you can't afford to at least cover the running costs of the car then it would seem you are overstretched in other areas and a loan is not going to be the answer. What happens next year when your car insurance (or any other large bill) is due....another loan?

My advice would be the same as Debt_Free_Chicks, to sit down and do a proper budget. Work out where you can cut back and then use that money to pay off your debts after all your expenses are covered (including the car insurance!). You don't need two credit cards so pay off the Capital One card and close it. Then work on the other credit card. The car loan is at a good rate so dont worry about it. Good luck!

ffs · 4 February 2005 at 8:27AM

There is only one situation I can think of where your idea makes any sense, and that is if you regularly incur bank charges for missed payments. Reducing the number of failed payments would reduce your charges, since one mistake can easily rack up £100 plus of charges (for say three missed payments), this might out weigh the additional interest costs if you consolidate. However, a higher level off awareness of your current account balance would be by far the better option.

Help Re Debt Consolidation

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