How to consolidate

richard83_2

I'm new to this site. But some of the information is useful.

I urgently need to consolidate a couple of loans and 2 credit cards as well as clear my overdraft. I am struggling to do this on a monthly basis when thy are all separate.

I've worked it out if I can get a loan to cover it all on a reasonable interest rate over 3 years I can pay out less than what I am currently.

But I have never missed payments and yet my credit rating is only fair? I have tried the suggestions to up my rating ie. electors roll etc but it doesn't seen to have improved?

I recently got rejected for a loan for the same and I am dissapointed and starting to struggle and not sure what I can do to improve the situation.

Does anyone have some advice on how I can improve this?

Tixy

The problem with consolidation is that many many people consolidate their debts without tackling their overspending and this in turn means they run up another credit card or another overdraft. Everyone thinks they will be sensible and not do this, but it only takes one unexpected expense such as car breakdown and you put it on a credit card saying you'll definatley pay it off next month, but next month is christmas so you put on a couple of presents and definately pay it off in January and then before you know it you have a consolidation loan and more debts and you are struggling again but now in even more debt.
Many many people on here will tell you the did this, they swore they'd never have more credit but it does creep up on you. I can certainly tell you I did. Thats the main reason while you find very few people who will recommend a consolidation loan on here.

The other issue is that as you already have a lot of credit you are unlikely to get a very good rate loan and with an expensive consolidation they are usually taken out over a longer period, and you cannot make overpayments to repay them quicker, so overall people end up paying much more in interest (even if the APR is lower than your CCs you can still end up paying more due to the increased time span).

Instead we recommend people start budgeting and reduce spending. Then either focus on paying off the highest rate debt first or focus on clearing one card balance. Once that card is clear you will often find that they will offer you a low 0% balance or a low life of balance transfer which you can use to move your next most expensive card balance onto. Gradually you clear the debts and improve your rating, and usually you are gradually reducing your APRs.

As I said before really before you even consider getting any more credit even a consolidation loan then I'd advise you to complete a statement of affairs and then look at whether you can decrease your costs or increase your income in order that you can start paying more off your debts.

richard83_2

Hi Tixy, This is fromt he link you left me before.. Probably not entirely accurate because for example my workk CC and Overdraft are not minimum payment but pay off immediately.. If you can give me advice i'd appreciate it.. In my view a consolidation loan would solve all my issues. I would commit to it and I am that desperate to get these issues sorted.

[tt]Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1890
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1890

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 433
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 0
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 99.1
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1282.1


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 6329.....(433)......0
Total secured & HP debts...... 6329......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax Credit Card............530.......14........0
Work Credit Card...............1000......1000......0
lloyds Overdraft...............2000......2000......0
Total unsecured debts..........3530......3014......-


Monthly Budget Summary
Total monthly income.................... 1,890
Expenses (including HP & secured debts). 1,282.1
Available for debt repayments........... 607.9
Monthly UNsecured debt repayments....... 3,014
Amount short for making debt repayments. -2,406.1

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -6,329
Total Unsecured debt.................... -3,530
Net Assets.............................. -9,859

[/tt]

Tixy

Hi Richard

Can you explain about the work credit card? Is this in your name or works? Is it used soley for work expenditure? Do you have this repaid to you in addition to your salary shown above?

With your overdraft do you mean its a £2000 balance just before you are paid and then your salary goes in taking it to around nil, then as your months expenditures & DDs go out it goes back down to £2000 od? If so then you are not really repaying it each month, you need to compare the balance at the same point in the month to work out how much if anything you are actually repaying (so e.g. the day before pay day compared to the day before payday the previous month).

Are the secured debts the HFC and Lloyds loans? Are these actual secured debts such as hire purchase agreements?

SouthCoast

I guess that some of your expenditure is missing.

richard83_2

Hi,

With regards to the overdraft, yes it si 200 which I nearly cover when my pay goes in every month, but then it goes back to 2000 again..

My work Credit card is solely for work expenditure, but where I unfortunately had to move apartments in the same month (I went from £370 a month including bills to £600 as I used to live with close friends) I had to use it for personal use so the cost left is mainly personal use that I need to pay asap.

The HFC and Lloyds loans are actually secured I took out PPI for events where im not in work (fingers crossed I never will be) for whatever reason..

Regards

Rich

Fortheloveofmoney

Hi there.

You need to add in your utilities and car costs.

I think you're being turned down for loans as your rent and secured loan is more than 50% of your take home pay.

Also is all of your debt listed? I thought the other thread said around 9K but this SOA only shows 3.5K.

richard83_2

My utilities come as part of my rent, and i dont drive or own a car. Yes all debt is listed. it does amount to around 9.5k but obviously shows 3.5 not including the full amount of my 2 loans.

Tixy

Sorry more questions (we will give some useful advice eventually honest!)
Do you know what the APRs are on all your debts?

The secured loans section means debts that are secured on an item that was purchased with the loan, so a car hire purchase, or a sofa or laptop on credit, if you don't keep up with the payments the item you bought can be repossessed.
I think you have interpreted it as insured loans - but its good news if they are not secured as unsecured debt is much preferable to secured.

Presume your £600 rent covers gas, elec, council tax water etc etc all in? Do you have a mobile or internet you pay for?

SouthCoast

Presume your £600 rent covers gas, elec, council tax water etc etc all in? Do you have a mobile or internet you pay for?

And you have none of these?

Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0

richard83_2

I don't know right now what my APR is. I would have to check out my documents but they are locked in my drawer at work and im not back til monday.
Oh right ok, no the loans are purely loans not against anything.
Yes Rent covers everything other than my mobile which is £52 a month approx, travel is £99.10 per month the troubles of living and working in london..