Loads of debts (want large loan to pay off but get refused)

Firsttimebuyer_4

Hi,

I'll start by listing my incoming and outgoing:

Salary: £1700(after tax)

Egg loan: £136 (£5000 left) 6.9% , 4years 6 months left
Barclayloan: £301 (£11500 left) 7.9%, 4 years 8 months left
Natwest: £273 (£10000 left), 6.5%, 3 years 8 months left

Coop card: Balance - £1000, 8.9%, credit limit £3000
Amex: £3800, 4.9% (life of balance), credit limit £5000
Barclaycard: £2200, 6.9% (life of balance), credit limit 2900
House Rent: £450

As you can see this is not really sustainable over a longer period and currently I can manage these debts just about. But i have no "fun" money.

I would like to get out a £25k loan over 10 years and pay off my most expensive debts. The other debts i can then manage to pay back more on finishing them earlier. I know this will cost longer in the long run but i can at least have some spending money and also be able to put some in a savings account. The problem is that no one wants to lend me any money for consolidating this. I've tried 5 banks this month and don't really want to do any more incase it will affect my credit rating.

The reason for my debts is probably as for most others. I was a student, then got a low paid job so had to get loans to cover my living costs, a car etc. My current job pays well (£29k) and is stable and i love it. But i really need to sort my finances out.

I will try my bank this week and go in to see them and explain the situation. Will i still be treated by a computer or will they look at my situation and see that I can afford a large loan over a longer period.

All help on this is much appreciated.

Thank you!!

lynzpower

hi there

I suspect that the reason why you are turned down for a new loan is that because you have too much debt. Getting a larger loan to "clear" it, wont do that , it will add interest to what you already have, so thats not a great plan ( believe me Ive done it ) The other thing is

I've tried 5 banks this month and don't really want to do any more incase it will affect my credit rating.

Your right, I think the damage might have been done in any case already.

One thing you can do to endeavour to repair your credit rating is to reduce the credit limits on those credit cards.

Coop card: Balance - £1000, 8.9%, credit limit £3000 ( reduce to 1000)
Amex: £3800, 4.9% (life of balance), credit limit £5000 (reduce to 4000)
Barclaycard: £2200, 6.9% (life of balance), credit limit 2900 ( reduce to 2200)

Are all the cards cut up?

I suggest you read southern scousers sticky first time posters adn then do a SOA for us, and then we can see if theres anything we can offer.


good luck
lynz

Imelda

Hi Firsttimebuyer!

I agree with lynz, I don't think this is the answer to your problems, I think it will just create more for you. Also, from evidence on this site, it seems that people who consolidate go on to run up even more debt.

Please post your SOA, you may be surprised how much money you can save.

southernscouser

I didn't think you could get unsecured loans over longer than 7 years anyway! :think:

Also although savings are generally a good idea they are a false economy if the interest you are being paid is less than what you are paying towards the debts!

A loan probably isn't the way forward. Especially as you've got some decent rates on your Barclaycard and Amex!

See this site to see how the two different ways would cost you.

Mrs_Sparkle

Hi there! I agree with Lynz and Imelda. Consolidation just got me further into debt as I never dealt with the root cause of the problem- my useless money management attitude. I'd be more than happy to take a look at your SOA and see if I can help you cut down on any outgoings to free up more cash. Don't worry- there are plenty of us here with debts similar to and more than yours and I for one have picked up some excellent advice on here and am making progress.

HairyHandofDartmoor

I agree with all of the above. You have some good advice there.

You need to address your problem of overspending, or things could just get worse in the future.

It took me 20 years to learn this, but I've finally got there!

Firsttimebuyer_4

Coop card: Balance - £1000, 8.9%, credit limit £3000 ( reduce to 1000)
Amex: £3800, 4.9% (life of balance), credit limit £5000 (reduce to 4000)
Barclaycard: £2200, 6.9% (life of balance), credit limit 2900 ( reduce to 2200)

Are all the cards cut up?

I havent cut the cards, but they are well hidden. The only card I use is COOP. I use that for daily spending as i normally manage to pay it all off but i ordered a holdiay this month....which I'm sure you guys will say i cant have!

I will do an SOA tonight. I think i've cut most of what i can but maybe there is more.

thank you!

lynzpower

you have put a holiday on a credit card

they cant be that well hidden mate can they :rotfl:

Dolly_Smith

there really is no point in saving when you're paying whopping interest charges - you say you have no 'fun' money, but you must have used the cards to buy stuff for yourself (holiday for e.g.!) or is it mainly living expenses?

I would never tell anyone what they can or can't have - it's none of my business! But I didn't have a holiday for four years - it's not a necessity, it's a luxury...

saubryn

Instead of consolodation have you considered balance transfers? If you could get a 0% offer and clear one of the higher rate cards with it then you would be able to pay it off faster since you're not losing anything in interest.

Theres a useful calculator at: http://www.whatsthecost.com/

Have you stopped running up extra on the cards now? If you don't mind me asking, what was put on the cards to end up with the debt you have? If you've stopped building it up, and can start getting it down slowly, then thats great. I think you can do this without consolidating, to be honest.

Good luck!

libitina_2

Firsttimebuyer wrote:

I would like to get out a £25k loan over 10 years and pay off my most expensive debts.

I'd just like to make the point that reshuffling your debt is not technically 'paying them off' as you are only robbing Peter to pay Paul. Not a personal dig at you, more perhaps aimed at the loan companies that peddle these kinds of idea's.