£15000 debts

Johan

Hi all,

I have debts £15000 worth on credit cards and mail order firms and also an overdraft.

I am considering a loan of 5.8%APR over 5 or 7 years with the postoffice, it will clear my debts and leaves me with just one manageable payment, and it will cut my outgoings by half, we are renting our house so no equity there!

I have economised everywhere! I will also change my bank to one that pays me a bit of interest, I will do that after I paid my debts so I have just one D/Debit to swap over.

My credit record is good and have no arrears with anyone, Is the loan the right way to go? Because the APR's that the mailorder firms and credit cards are charging is murder!!!




All advice is welcome!

*Louise*

Ooo....snap!!!

I am currently transferring my bills over to a 0% credit card to pay some off that way, an I'm trying to pay off the couple of catalogues I have because youre right - the APR is shocking!

I suppose the main questions are what monthly payment are you going to have to make and can you afford it?

in*the*red_6

Hi Johan
If you can post a bit more detail about the breakdown of the debts and your income then I'm sure lots of people will be able to help.
I personally would be wary of taking out a fixed loan over 5 or 7 years to consolidate debts, it's something I nearly did and when the paperwork came through I got seriously cold feet and didn't go ahead. I'm so glad now that I didn't as, having found this site, I am sure that by snowballing my debts and moving debt around to save interest I can be debt free much sooner than the 5 year term of the consolidation loan and I can still overpay the debt when I can e.g. with bonuses etc by keeping it flexible. TBH we'd have run up even more credit card debt if we'd done this aswell!
HTH but do post further info before you make your decision.

black-saturn

I would advise against anyone taking a consolidation loan. All it does is put you in debt for more over a longer period of time. There was obviously a reason for you getting into debt in the first place. Maybe you are overspending in your lifestyle and getting a consolidation loan will only lead to more debt.

It would be a better idea to stick to a budget which you can afford and pay the debts off without the loan.

Maybe if you gave us a run down of your incomings and outgoings we could give you some pointers as to where you could economise.

Thefunkygibbons

What are you going to do with the half you save? This really ought to be thrown at the debt, but a fixed loan will remove flexibility

Could you get a life of the loan credit card with a similar rate but work really hard to clear it

If you have the discipline, I am sure you could clear it much quicker

Johan

Thank you all,

I have taken your comments aboard, I will probably give that loan a miss and may be I should bin those mailorder books now, (binman comes round tomorrow, Oh...better recycle them) What about the credit cards and store cards, cut them up or.........pay them off and cancel them?

Thefunkygibbons

Store cards - try to clear as soon as possible and then cut up

Then work your way through the credit cards based on highest APRs first

in*the*red_6

Johan wrote:

Thank you all,

I have taken your comments aboard, I will probably give that loan a miss and may be I should bin those mailorder books now, (binman comes round tomorrow, Oh...better recycle them) What about the credit cards and store cards, cut them up or.........pay them off and cancel them?

Johan

Glad to hear your rethinking that loan, I don't think you'll regret it! I don't know much about store cards and whether you can balance transfer them to cheaper rate credit cards ?? but definitely cut them up and pay them off as a priortiy as the APRs will be extortionate!

sarah_elton

Cut them up already so long as you don't need any details off the cards when phoning them with queries etc.[*]

You then can't be tempted to use them, but the account is still open till you pay it off.

* Or even if you do.... I cut up a credit card before closing the account, and had to phone to query something. The automated voice told me about three times to enter my expiry date (not a clue!), but then gave up and put me through to a person since I was struggling with the system.

frosty

we had 11 credit cards,as soon as we received them I cut them up and put them in a file,we have been moving our debts around 0% cards for a while now, as we pay a card off we close the account,make sure they send you a letter confirming the account is closed.We have 5 cards at the moment.

Tondella

If you have a good credit record then take advantage of the 0% introductory offers out there and transfer the balances with the highest APRs onto 0%. Then put all the money you can spare (after making minimum repayments on your cards) towards the card with the highest APR. If you can spare the small amount of time and effort required to administrate this system then you will get a much better deal than if you tied yourself into a loan with fixed interest and fixed periods. Good luck!