Sleepless nights!

katieb.1983

hi there, I am confused and worried. I have stupidly managed to get myself into quite a bit of debt over the last few years, approx 25k with credit cards x3, an overdraft and loan. I also have a mortgage and the rest of the bills that come with the house, gas electric water food etc. I have a secure job where my income is around 1600per month, but am finding it hard to have any money left once ive paid the debts. I have not got to the point where am not reaching minimum payments or having threatening letters but am scared and having sleepless nights how this debt will keep growing with the interests added on.
Therefore i was thinking of applying for a consolidation loan over 5 years to clear my debts.
Thanks for reading and please advise if u can thank you

Tixy

Hi Katie

Consolidation loans are not generally recommended on this board for a variety of reasons, including you often pay the debt over a longer period keeping you in debt longer and possibly paying more interest ovreall. They don't necessarily deal with the issue of spending more than you earn but most importantly, many many people who take out a consolidation loan end up running up more debts alongside it (re using the overdraft or credit card) and end up in more debt overall. Everyone thinks that they won't but its very easy to let it happen.
Another issue is that you will probably struggle to get an unsecured consolidation loan for another £25k on top of the £25k debt you already have.

What I would suggest before you even consider a consolidation loan is to draw yourself up a statement of affairs. This will help you see whether you can manage your debts as they are at the moment without using any further credit. If you post the results up on here people may be able to suggest alternatives that won't get you further in to debt.
http://www.makesenseofcards.com/soacalc.html

RAS

Definately do the SOA. There may be ways to make this work, ways to pay the debt more effectively or ways to incrrease your income.