Is Now a Bad Time to Consolidate Debt?

Nechtangel_2

I have some 'old' debt from storecards, credit cards etc, and I want to sort out my finances for good. I have sat down and made a realistic budget, made sure I am paying for things as cheaply as possible. I was thinking about taking out a personal loan to consolidate my outstanding cards so that I can pay them off, but I'm worried that this may be a bad time (what with the credit crunch etc) to take out a loan... any comments???

beverleyhills

Welcome. Consolidating debts into a loan is not the best way forward. You pay interest on the whole amount for the period of the loan. It is best to reduce your debt with highest APR first.

Establish your income and expenditure using this link.

http://www.makesenseofcards.com/soacalc.html

and use this link.

http://www.whatsthecost.com/snowball.aspx

Come back for advice

immoral_angeluk

Generally consolidation is a bad idea at any time. It only moves around your debt and doesn't actually deal with it. Also far too many people end up caught in the consolidation-run up debt on the newly cleared cards-consolidate again cycle.
There are better ways of dealing with debt and many places you can get advice, either from the kind people on here or from non profit organisations such at the Citizens Advice Bureau, CCCS or Payplan.

RAS

if these are really old debts (no payments in the last 6 years) they may well be statute barred.

So do check that out first.