Trying to consolidate, need help..

markalder

Hi,

I've read as much as I can on these forums but seem to be a little stuck now as to how I can sort my situation.

To cut a long story short, I owe roughly £8000 (creditcards, store-cards and a loan). My monthly outgoings to pay these debts (mostly minimum payments) are £360.

I would ideally want an £8,000 loan to pay everything back, and having looked around, the payment would be around £260 a month over 3 years, saving me £100 per month and actually reducing my debt.

The problem is, I recently applied for a new loan and was rejected, the reason being that I have too many outstanding commitments. Fair enough, I suppose.

Obviously I want to use a new loan to pay off outstanding debts and save money, but how can I go about doing this if I'm not being given new credit? I have been rejected for credit quite few times in the last 12 months (maybe 4 times), however one of my credit cards had it's credit limit increased in April without me being asked.

Could anyone offer advice on where I could get a loan to pay off my debt that would enable me to save money?

Thank you for reading.

IcklePickle_2

Because of the credit crunch you may not be able to get a loan anymore. Lenders are being much more strict before loaning money. Is it possible to cut your outgoings or increase your earnings, and pay that extra money off the debts?

Are any of your credit cards offering good deals on balance transfers? 0% for 12 months or around 6% for life of balance? If so you may be able to do a credit card shuffle - read Martin's guide to this for info. Then you'll have the debt at the cheapest rate you can get. And then overpay the cards to try and get rid of them.

markalder

Hi

Thanks for the reply.

I will find out if any of the credit cards I have are offering 0% etc. Are you suggesting that I ring them up and see if they can do anything about the rate of interest I am paying?

I have tried to obtain a new credit card a few months ago, with 0% on balance transfers, but was declined.

happycamel_2

You can try asking. Bear in mind that each of these credit applications is logged on your record too and can put people off.

I understand your thinking with the consolidation loan but too many people do that then spend on the credit cards again and wind up even further in debt and eventually can't pay. Lenders are therefore wary of getting you deeper in debt these days, they've no guarantee that you'll only use it for consolidation.

I think that whilst its a good idea to have a bash at lowering the interest you really just need to focus on six months of over paying on the highest interest debt. After that time try one application for credit. If that fails do another 6 months paying. You'll get there eventually - out of debt and with an improved credit rating but it's going to take time and there aren't many short cuts

Good luck

markalder

Thanks again for the reply.

In the last hour I've applied for the Barclaycard Credit Card at 6.9% interest (+ free balance transfer). and requested £2800 limit.

I WAS ACCEPTED!

I have no idea how, but it's good news all the same.

My plan is to put on my wife's £1900 Capital One card which is an amazing £93 per month minimum payment, and then £900 from Argos and Debenhams Store Cards.

This will max out the new card but will close 3 other accounts.

Current Payments on these cards:
Capital One £93
Argos £15
Debenhams £18

=£126

I can't see the new card being a minimum payment of £126 on £2,800 - but could anyone tell me roughly what it might be? Then I can see how much I'll be saving, which will go towards other debt.

dancingfairy

I've no idea what the interest would be - hopefully someone else can help work that out.
Just a quick note of caution: make sure you cut the other cards up and the new one so you don't start spending again. Sadly some people have done what you're doing and gone back to spending, got another card to consolidate etc. Some people have done this 2 or 3 times and there seems to be quite a few people who have done this and I would hate to see you back here in a few years with much higher debt.
Good Luck
df

lanfear

Well dunno if this helps but I've got a Barclaycard and my current minimum repayments on a debt of £5k are about £115 a month. So £2,800 should be lower.

Correction - I had a barclaycard till I 'fessed everything up last night about my spending and handed everything over to my boyfriend. Now I just have a huge debt

Angyles

Have a look at the Minimmum Repayments Calculator below, this should help you calculate the minimum repayments.

http://www.moneysavingexpert.com/cards/minimum-repayments-credit-card#calc

lanfear

dancingfairy wrote: »

I've no idea what the interest would be - hopefully someone else can help work that out.
Just a quick note of caution: make sure you cut the other cards up and the new one so you don't start spending again. Sadly some people have done what you're doing and gone back to spending, got another card to consolidate etc. Some people have done this 2 or 3 times and there seems to be quite a few people who have done this and I would hate to see you back here in a few years with much higher debt.
Good Luck
df

*sigh* I've done this too - the barclaycard was to consolidate 2 other cards. Did it? Like hell. I just spent it.

markalder

Thank you very much for the replies.

I assume now that the minimum payment will be around £75 based on the link posted above. Really can't wait to get it in place.

I will DEFINITELY be cutting up the cards once the balances are transferred, but I am no angel - I am in this mess because in the past I have spent on cards that I had cleared. This is a lesson learned, and I will never do it again.

markalder

Bizarrely - but pleasingly - I was given £3000 more than what I asked for.

Unexpected, but I will be transferring even more existing debt to this card now.

I've worked out that, if I'm allowed to transfer everything I want, I'll save £66 per month - and also be paying debt off.

Onwards and upwards.