Debt Consolidation

kill

Hi There,

Recently found this website, this is my first post, so I just want to say what a great place this is and I hope to chat to many of you soon.

I have a quick question which if anyone has time to answer would be appreciated. THANKS.

Ok, I am about £15,000 in debt at the moment which has been built up when I was young and stupid, credit cards etc. I don't like being in this position!!

The debts I had were mainly credit cards etc, and I thought it would be a good idea to get a low rate loan to consolidate these debts instead of paying lots of different interest rates.

Was this a good idea? I'm currently working on selling a lot of items on eBay to help bring this debt down, and have recently been bringing in my own lunches to work (saving about £200 a month!!), so I am trying, but I still feel I am a long way off.

Any advice anyone can offer me would be appreciated, as at the moment I feel very much burdened with this debt and don't really know what else I can do to reduce it

Thanks for taking the time to read this.
Best Regards

Annie_Fanny

Consolidation loans - Noooooooooooooooooooooo!

Best thing to do is look at this thread:
http://forums.moneysavingexpert.com/showthread.html?t=107280
and post up your 'Statement of Affairs' (SOA) so we can suggest ways to cut back and get those debts paid off quicker.

Is also a good idea to list your debts with APRs included.

ALSO look at this site and learn about the snowballing technique!
http://www.whatsthecost.co.uk/snowball.aspx
This technique will save you £££ and years of debt repayments to a consolidation loan.

Like you said you are young and feel burdened by debt BUT a consolidation loan will take years to pay off and will end up costing you more in the long run. Best thing to do is attack your debts and get shot of them for good! It has been done before!

Good luck!

Annie

lynzpower

Annies right

Consolidation loans arnt going to get you out of this rut quicker.

HAve a look at Southern Scousers first time posters and pop up an SOA we can see where we can save you some extra money to pay off your debts.

Well done on the ebaying, are you paying the proceeds directly off your debt?

Welcome

jesster_2

Hi welcome to MSE.

Consolidation loans are very rarely the way to go. That's not to say they don't make debt cheaper for some people, provided you only use them to lower your overall interest payments and NOT to lower your MONTHLY payments and repay your debt over a longer time.

If you post an SOA with all the details of your incomings and outgoings and all your individual debts, APRs and repayments then people here will be able to help you find the cheapest and quickest way to pay them off.

Good luck.

Glitterari

Welcome to the board. First off we will need a SOA (Statement of Affairs) listing all of your outgoings (bills, rent, debts, food, clothes, etc) and your income (don't include ebay as this is not guaranteed).

Once we know this we can really help you.

Annie_Fanny

Also consolidation loans teach you nothing about budgeting or learning what got you in the sh*t in the first place. There are many people on this board who will hold there hands up to having had a consolidation loan, then run up loads of debt again on top of this and then have to take out another consolidation loan to consolidate the first one! Part of this site is basically about financial re-education and boy did I have a lot of learning to do (and still do)! Have a look at this article by Martin Lewis on budgeting:

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1089226742,17582,

I know budgeting isn't sexy in our debt laden society but I tell you what having money in your savings account is!

I think many people automatically think of consolidation loans when they are in financial trouble. The banks marketing must be very good!

Glitterari

Hmmmm - i got the impression from OP that he has already taken a consolidation loan??

lynzpower

Well spotted Glitterari - sorry to the OP!

Erm, no consoluidation loans arnt the best Idea, although whats done is done I guess,

How long have you got to go OP? Do you have PPI?

Kevicho

Annie_Fanny wrote:

Also consolidation loans teach you nothing about budgeting or learning what got you in the sh*t in the first place. There are many people on this board who will hold there hands up to having had a consolidation loan, then run up loads of debt again on top of this and then have to take out another consolidation loan to consolidate the first one! Part of this site is basically about financial re-education and boy did I have a lot of learning to do (and still do)! Have a look at this article by Martin Lewis on budgeting:

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1089226742,17582,

I know budgeting isn't sexy in our debt laden society but I tell you what having money in your savings account is!

I think many people automatically think of consolidation loans when they are in financial trouble. The banks marketing must be very good!

While in the majority of cases that is true, ive done it that way after working out that would be the best way for me at that time

I dont think these loans should be dismissed alltogether as they are a useful tool, but i agree completely that they are not a solution, just a tool

You should sit down and work out which is the best way for the individual to pay off the debt

Sometimes having a lower monthly payment for the bulk, will help you clear some of the smaller, nastier debts quicker

Do some research first and find the best way for you

jesster_2

oops, sorry OP! you know how we are when we spot the words "consolidation loan"!

Annie_Fanny

Yes it's a total knee jerk reaction! Sorry OP!

DOH!