Consolidation loan

rickjt62

Hello

Although I browse the site often I have never posted before

I am in a good financial position with net monthly income in excess of £2500

However, I owe £24500 on credit cards with rates from 19.99-23.00%

I have been trying to get a consolidation loan to restructure but it is proving very difficult

I have no arrears, no CCJs and as far as I can tell from my credit file, the only thing going against me is the amount of searches registered after I try various organisations to solve the issue

My bank (with whom I have a good relationship, but obviously not that good!) cannot help me as not all of my income is directly credited to my account

I have never been overdrawn, nor have I ever had any arrears on any of the cards I have

I do not want to go down the IVA route yet as I want to try and sort this myself

I am a tenant so secured loans are not an option

Any advice appreciated

bargainbetty

Have you stopped spending on the cards, or do you still use them? If you are still spending, you will be very likely to run up the debt again! Trust me, I've done it twice, and it took me ten years to get it straight.

Use the stickies at the top of the page to create an SOA. If you are happy posting it up, let people here advise you on how to save money, and then throw that at the debt with the highest APR (costs you the most, obviously).

If you can obtain a new card with a low-life of balance transfer rate, or 0%, start credit card tarting - move the debt to the lowest rates you can get, but keep over-paying the highest rate.

If the banks come back to you and try to up the rates, refuse to accept it. They will freeze the cards, but you don't need more debt anyway!

As you clear a card, find out if they will give you a balance transfer to a better rate. If so, move as much over as you can. If not, cancel the card outright. This will help your credit rating (you won't appear to have available credit) which will also make it easier to get 0% deals elsewhere.

Good luck

rickjt62

SOA

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 2592
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2592

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 625
Management charge (leasehold property).. 0
Council tax............................. 90
Electricity............................. 38
Gas..................................... 38
Oil..................................... 0
Water rates............................. 23
Telephone (land line)................... 35
Mobile phone............................ 36
TV Licence.............................. 13
Satellite/Cable TV...................... 62
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 0
Petrol/diesel........................... 50
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 23
Life assurance ......................... 63
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1246


Assets
Cash.................................... 600
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 600

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................24500.....640.......19.99
Total unsecured debts..........24500.....640.......-


Monthly Budget Summary
Total monthly income.................... 2,592
Expenses (including HP & secured debts). 1,246
Available for debt repayments........... 1,346
Monthly UNsecured debt repayments....... 640
Amount left after debt repayments....... 706

Personal Balance Sheet Summary
Total assets (things you own)........... 600
Total HP & Secured debt................. -0
Total Unsecured debt.................... -24,500
Net Assets.............................. -23,900

dancingfairy

You aren't going to get a consolidation loan - you owe 24.5k - you ask the bank for 24.5k to pay off you debts, the bank will say hang on a minute this means you will have over 50k's worth of credit - how do we know he isn't going to just spend the money we give him, or pay off his credit cards and then start spending again which sadly is what a lot of people do - the amount of peope who come on here having had 1,2 or more consolidation loans is testament to the fact that 99% of the time it doesn't work.
Regarding your SOA it shows you have 700 a month spare- now where is this money going? clearly you will be buying some new clothes at some point in a year, car tax, mot , repairs etc cost money, you must have some entertainment, birthdays, etc but if you can even find half of that to put towards the credit cards each month you will be on the right track. It's probably dissapearing down the pub, on clothes, chocolate, beer/wine, cd's/dvd's nights out, magazines, computer games,lunch out - whatever your vice is it's dissapearing somewhere. Try doing a spending diary and see what you can cut down.
Best of luck
df

bargainbetty

rickjt62 wrote: »

SOA

Telephone (land line)................... 35 Seems a lot to spend on phones when put together - can you reduce?
Mobile phone............................ 36
Satellite/Cable TV...................... 62 - Do you use/watch everything?
Groceries etc. ......................... 150 This could reduce a bit, but your surplus doesn't really need that huge a sacrifice.
Petrol/diesel........................... 50 - Petrol and no car?
Life assurance ......................... 63 Do you really need this? You don't have kids or a mortgage so why such high coverage?

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................24500.....640.......19.99 Is this all on one card? If not, can you break it down?

Amount left after debt repayments....... 706 Do you have this left? If not, keep a spending diary of where your money goes.

Just a few ideas, but your best bet might be to look at a low-life-of balance card away from your existing provider. Once you have transferred as much as possible onto it - reduce your available balance on the main card to reduce your available credit, making it easier to get another low-life-of-balance card in about six months.

rickjt62

Thank you so much for your comments - to address some of the points raised:-

Telephone (land line)................... 35 Seems a lot to spend on phones when put together - can you reduce?

This includes internet subscription

Satellite/Cable TV...................... 62 - Do you use/watch everything?

No - but I'm tied up with them for another 6 mths - after that it's the basic pack

Petrol/diesel........................... 50 - Petrol and no car?

Company car - I pay the some fuel, they pay all the rest

Life assurance ......................... 63 Do you really need this? You don't have kids or a mortgage so why such high coverage?

To cover all the debt if I expire ... if I didn't have the debt, I would reduce the cover - plus there's critical illness cover in there

The debt is split between six cards with varying interest rates from 18.32% APR to 22.35% APR

Balance split are £5900, £3900, £ 3888, £3750, £3600 & £3462

I have closed two of them down as they wanted to hike the interest rate to 23.9 & 37.9% So am left with paying off the balances

With regard 0%, the best available to me is until May 2012 with a 2.5% charge ... with a max of £7600 available to transfer balances

Thanks again, all

CH27

With £700 per month after bills you don't need a consolidation loan.
You have plenty of excess income to pay off your cards.

Are you still spending on them?

You need to look at which charges the most interest & pay more of that & not spend anymore on it.

rickjt62

Agreed ... no longer spending on them

I'm considering balance transfer on two of them, one of which if I pay the minimum each month, 80% of that is added back in interest ... the other is the one with the 22.35% APR ... total balance transfer £7062 at 0% until May 2012

I do pay over and above the minimum on most cards but was looking to get rid of them and have a lower APR

Thanks

CH27

rickjt62 wrote: »

Agreed ... no longer spending on them

I'm considering balance transfer on two of them, one of which if I pay the minimum each month, 80% of that is added back in interest ... the other is the one with the 22.35% APR ... total balance transfer £7062 at 0% until May 2012

I do pay over and above the minimum on most cards but was looking to get rid of them and have a lower APR

Thanks

That is a big step in the right direction.

RAS

Hi

Do you understand snowballing? You pay off the most expensive debt first - see www.whatsthecost.com. You can play different scenarios on there.

With respect to a loan, having a low APR does NOT guarantee that you will not end up paying more. A 10% APR on a loan over 5 years could cost more and take longer than paying off your existing debts effectively.

We need a full list of debts, value, maximum limit, APR and if closed, say so.

carrielovesfanta

rickjt62 wrote: »

Thank you so much for your comments - to address some of the points raised:-


Life assurance ......................... 63 Do you really need this? You don't have kids or a mortgage so why such high coverage?

To cover all the debt if I expire ... if I didn't have the debt, I would reduce the cover - plus there's critical illness cover in there


Thanks again, all

Could you reduce it to just critical illness cover? I understood that if you die, the debts will be paid out of your estate (if possible) and then will have to be written off. If you die, I don't think you'll be able to worry about the debts!!