Consolidation for Poor Credit?

haloed

Hi,

I've basically got myself into a bit of a mess with a PayDay loan (£800), which I am unable to pay back. For the past six months I have been paying back the interest only (£160) and extending this every month. On top of this I currently have two maxed out credit cards (one £250, one £500) which I am unable to pay back at present.
I am aware that I have a bad credit rating, so would there be any specific lender who could lend £1500 to clear all of the above debt, enabling me to make one monthly payment to clear the debt.

Thank you!

MFWannabe

If you cannot currently pay back the loans and credit cards you already have how are you planning to pay back a new consolidation loan?
No normal lender will be willing to lend you £1500 with this track record of paying debts.
You need to post and soa and see where you can make cutbacks to pay back the debts you currently have as they are

haloed

I basically want to be able to pay back my pay day loan over a longer period of time as I'm in no position to pay back the £800 accumulated. The interest is currently costing me £160 a month alone so I was hoping there was an option to transfer and pay back my debt at under £200 per month?

MFWannabe

Unfortunaly a normal lender will look at your credit history and see that you have 2 maxed out credit cards that you say you are unable to pay at present; are you making any payments on these? If you're not then they will see from your crefit file that you have missed payments. Thet aren't going to lend you money based on this history as they have no guarantee looking at your track record that you will pay them back.
Is there anyone in your family who would be willing to lend you the money? At least then you would get you out of the cycle of paying such high interest. Do you have anything you could sell to pay off at least the payday loan?
You really need to post an soa so we can see all incomings and outgoings and give you good advice where you can make cutbacks to pay off these debts

katsu

Look for your local credit union and speak to them about a loan to replace your payday loan. They often lend to get people away from payday loans.

haloed

Thank you.
I've just had a look at the Rugby Borough Credit Union and it states that to take out a loan you need to have been a member for at least three months? Is this membership the only way to proceed?

jkelly81

FREEZ wrote: »

If you cannot currently pay back the loans and credit cards you already have how are you planning to pay back a new consolidation loan?

This is a rather foolish statement, I am sure most people looking to consolidate would be doing so in order to reduce their monthly repayment, in turn making it more affordable. For example, my debt is around £800 per month, but I can't afford all of this. I can afford maybe £400. The repayment on a consolidation loan could be as low as £330.

330 < 800!!!

MFWannabe

jkelly81 wrote: »

This is a rather foolish statement, I am sure most people looking to consolidate would be doing so in order to reduce their monthly repayment, in turn making it more affordable. For example, my debt is around £800 per month, but I can't afford all of this. I can afford maybe £400. The repayment on a consolidation loan could be as low as £330.

330 < 800!!!

Not a foolish statement at all; that's exactly how a lender will see it!

jkelly81

FREEZ wrote: »

Not a foolish statement at all; that's exactly how a lender will see it!

Well I think this bad attitude of lenders is hindering many people, forcing them into taking on "more credit" at terrible rates which affects them worse and then results in none of the original debt being repaid which will damage the economy.

MFWannabe

jkelly81 wrote: »

Well I think this bad attitude of lenders is hindering many people, forcing them into taking on "more credit" at terrible rates which affects them worse and then results in none of the original debt being repaid which will damage the economy.

Unfortunately yes; this is also very true.

bottleofred

Regarding consolidation of debt, can I just say that it only works for around 10% of people who try it and unfortunately, I wasn't one of them. So please think carefully about consolidation or borrowing from high interest sources, as I did it and it only made things worse for me.

Good luck