should i get a loan to repay credit cards? SOA added

Flipped27

I have done it before, it hasn't worked, but I would get rid of all cards this time, I need to make some serious changes...

Is it always a bad idea to get a loan to repay credit cards? My min repayments on credit cards are £360 a month - one of them is virgin where i pay £90 a month but £85 is interest?!

If i got a loan to pay them off, over 10 years, it would be £260 a month....

should i just dismiss this or consider it? I am stuck, scared and can't see a way out...

MS_Dolphin

Flipped27 wrote: »

I have done it before, it hasn't worked, but I would get rid of all cards this time, I need to make some serious changes...

Is it always a bad idea to get a loan to repay credit cards? My min repayments on credit cards are £360 a month - one of them is virgin where i pay £90 a month but £85 is interest?!

If i got a loan to pay them off, over 10 years, it would be £260 a month....

should i just dismiss this or consider it? I am stuck, scared and can't see a way out...

Hi,

Try not to be too scared, you might be stuck, but there is always a way out and always plenty of help about.

I don't want to pre-judge, but the clue is in your first comment, "I have done it before, it hasn't worked."

Nevertheless it is not always the wrong option, but I'd suggest you complete your 'SOA' (see the link at the top of the thread), give more details and then I'm sure you'll get some more informed advice.

Good luck

MS_Dolphin

Found the SOA link:

Here is a link to a really useful SOA calculator thanks to Clariman. CLICK HERE

Good luck again.

chalkie99

What are your total debts and how much do you earn?

Do you know for a fact that the payments are £260 a month for you personally or is that an example you have seen quoted as a "typical" apr?

In other words, have you been approved for the loan?

Flipped27

Hi, no i haven't been approved for the loan - i haven't replied yet, so it is probably too good to be true anyway....

SOA - Sorry, i wasn't sure about all the APRs so I left them blank..

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 778
Partners monthly income after tax....... 1503
Benefits................................ 429
Other income............................ 0
Total monthly income.................... 2710

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 775
Management charge (leasehold property).. 0
Council tax............................. 186
Electricity............................. 47
Gas..................................... 53
Oil..................................... 0
Water rates............................. 61.5
Telephone (land line)................... 12
Mobile phone............................ 15
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 350
Clothing................................ 0
Petrol/diesel........................... 40
Road tax................................ 15
Car Insurance........................... 21.27
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 300
Other child related expenses............ 50
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 20.69
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 0
Entertainment........................... 25
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2038.46


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................3058.23...68.81.....0
credit card....................339.69....10........0
credit card....................387.42....10........0
loan...........................0.........264.......0
loan...........................0.........154.2.....0
credit card....................1772.59...29.97.....0
credit card....................893.89....20.11.....0
credit card....................2971.45...66.85.....0
credit card....................5806.01...87........0
credit card....................4650.71...63.28.....0
Total unsecured debts..........19879.99..774.22....-


Monthly Budget Summary
Total monthly income.................... 2,710
Expenses (including HP & secured debts). 2,038.46
Available for debt repayments........... 671.54
Monthly UNsecured debt repayments....... 774.22
Amount short for making debt repayments. -102.68

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,879.99
Net Assets.............................. -19,879.99

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

chalkie99

Well, apart from the fact that you are unlikely to get the interest rate you were hoping for, it seems you need to borrow £20,000 which would give you a total debt of £40,000 as the loan company has no guarantee you will actually pay off the cards. As you have been down this road before you can sort of see their point

From your SOA it doesn't look like it will happen unless other posters have better ideas.

Sorry to rain on your parade.

Flipped27

From my SOA, doesn't look like what will happen? That I will get the loan? Or pay off my debts somehow?! Panic!!!!

katsu

Your water rates and council tax both look high to me. Have you explored water meters?

property.advert

Council Tax seems very high, water rates as well, food perhaps but I know there are 5 of you, no life or other insurances ? nothing for the dentist ?

No mention of what the loan amounts are or any expiry dates and yet they cost £420 a month.

The CC debts are 20k, what are the loan debts ?

Foundational

Don't panic...! I think Chalkie will have meant you would be unlikely to ge the loan, as lending you another £20K would double your debt.... Then there's the unstated loan amounts on top of that. It would be very helpful if you could state how much is owed on each of these loans... an estimate would do for a start. And the APR's on your credit cards would be helpful too.

There's always a way to get out of debt.

Hang on in here for good advice -

Verbatim

Have you got insurance on any of the cards or loans? It might be an idea to cancel these &/or reclaim the money already spent. As you are short by £102.68 it may be possible to cut down a bit and get some extra income to meet the gap.

You could snowball, paying minimums to all cards except the one with the highest apr which you pay everything you can find to. When this one is gone you do the same to the next highest and so on.
Could you take a lodger or a foreign student? This would be the highest extra income quickly. Also see the up your income thread and check you're receiving all the benefits to which you're entitled, especially with childcare expenses.