To get a loan or not?

ChrissyCamberwell

Hi

Just wanted to pick a few brains!!

I am considering getting a loan for 4 years to consolidate my current credit card debt. I thought about getting a 0% credit card, but was turned down for an Egg card and as the amount I'd like to consolidate is about £6,000 I'm not sure I'd get a card with a limit that high.

The debt I'd like to consolidate is £2k from 2 overdrafts, and £4k from 2 credit cards. I have looked at a few loans and Tesco seems quite good, and the repayments over four years would be £150 which is really manageable for me at the moment. I'm paying around £65 per month in interest on the o/d and credit card, and I'd like to get on top of the various different accounts I have.

I am considering going to see a financial advisor to ask their advice. I'm 32 and I earn £30k a year and don't have a mortgage, but my partner and I are thinking about buying somewhere in the next few years. I have other debts to the Student Loans company which I'm paying off at £175 per month for another 3.5 years, and to my mum which is £200 a month for another 3 years. So the idea is that in 3-4 years I will be debt free (well, apart from that mortgage!!!).

The only thing that really bothers me is that I would like to have a baby in the next few years, and I'm not sure what the situation is with repayments if I am on maternity leave and not working. I heard that some places allow payment holidays, but I think these are becoming very rare. Is it stupid to get a 4 year loan if I'm planning on having a baby in that time?

I just wondered if anyone had any advice? I occasionally get myself worked up into all kinds of knots about this, but when I see it written down I realise it's not too drastic, and I'm at least making some headway with the debts to SLC and my mum.

Thanks in advance,

Chrissy.

Rafter

Chrissy,

I think you will find it tough to get a consolidation loan for that much given your other debts.

Banks are really reluctant to lend to people who actually need to borrow these days ironically!

Your best bet is to get hold of a copy of Martin Lewis' book, go on a money diet, start snowballing your debts (paying off the highest interest ones first).

Your debt situation isn't drastic, but a consolidation loan probably isn't the answer. You just need to get organised and get tough with yourself about getting your current debt paid down.

Good luck

R.