Advice

thorpe1

Have I done a stupid thing??

I recently had my lightbulb moment, and realised I had to much debt. I told my mum the level of debt I had and she was gobsmacked. she has offered to take a loan of £7,000 out for me at a rate of £152 a month to clear as follows:

natwest credit card: £3,500 17.9%
natwest overdraft: £2,400 18%
next store card: £900 29%
capital one card: £100 apr unknown

All these cards and overdraft facilities will be closed and paid off in full. do any of you think this is a good idea or completely stupid of me to take out yet more debt? the loan rate is 5.9%????????

lynsayjane

i'm really not very good at the advice bit, but hugz and congrats on having a lightbulb, it's the first step.

as far as consolidating goes, make sure and cancel all the cards, i did it once and didn't cancel, then had wee 'emergencies' and now, well look at my sig...

southernscouser

Most people are against consolidation loans on this board but if used properly and you have controlled your spending habits to live within your means then they can be very beneficial.

Firstly you have to look at why you got in to debt and then take measures to rectify the problem(s).

Once you have got control of your finances you will be in a much better position.

Obviously if you get a loan and clear the credit cards without having addressed the problem you will only find yourself getting deeper into debt.

If you can honestly say that you wouldn't run up the debts on the cards again then have a look at this site. It will tell you how long it will take you to pay of your debts and how much it will ocst you in interest. If the loan works out cheaper then thats great.

However you would have to cut your cards up AND cancel the accounts and be in control of your spending!

CLAPTON

several things to consider:

if you were unable to pay the monthly installments to your mother (lose job, serious illness or whatever) the debt would be your mothers and not yours...could she pay the amount back herself ?

are you now in control of your spending..are you now living within your means...why not post a SoA here so people can offer suggestions.
It may be better to reduce your spending and pay the debts back yourself.
if you're not in control of your spending its likely you will simply run up more debts and things will soon become worse.

is the loan a fully flexible loan so you could overpay and clear the debt more quickly?

thorpe1

Thanks for the help.
I got in to this debt as i bought my first home nearly 12 months ago and my god it costs some money ha ha. I also have a natwest loan which was a previous attempt at consolidationg and well it didn't work

i have got my spending under control i know everything i need to pay every month and i pay it. trouble is the intrest really annoys me especially when loans are going so cheap. Point of getting my mum to get the loan is i have been refused for a loan.

DrEvil_2

Personally speaking, I would say thanks Mum, but I got myself into this mess, and I will get myself out.

Loans look good on paper, but are often a source of regret. A lot of people deeply regret them - seriously very deeply.
Have you spending habits changed, or are you looking forward to getting the loan to have more disposable cash?
<Lecture over>

I suggest you apply for 0% interest cards
If you have enough limit on your Natwest, try to move your Next store card balance onto it.

jessicamb

Hi Thorpe1

Just a thought - last time when you consolidated did you say the same things to yourself? Not necessarily to post but for your own mind what has fundamentally changed since then? If you can answer those questions then maybe go for it if you are very sure that it wont happen again.

If it all went wrong (and I'm not saying it will) you could be in a horrendous situation with your family.

Like SS said why not post an SOA then maybe we can help you cut costs in some area leaving you with more to throw at the debts.

thorpe1

All cards are maxed out and I have been refused credit twice in the last month. Like I say I got burnt on my last consolidation attempt and think I have learned a very valuable lesson.

jessicamb

Also it will probably take longer to clear the debts using the loan than it would be to snowball them.

DrEvil_2

thorpe1 wrote:

have been refused for a loan.

Firstly - sorry. My last post is saying similar things to the others.

Do you know why your load was refused? I had all sorts of trouble that turned out to be silly things I could fix, once I had a copy of the credit report from the Experian and Equifax.

thorpe1

it is not me my credit rating was excellent its my oh who has a ccj for previous rent arrears, I am currently claiming my bank charges back to try and pay this default account off for her but it will still be on my record for six years, we are associated through our joint mortgage.