Debts consolidated!

LewisC_2

Hi everyone,

I got a call from my bank manager yesterday asking me to come in and see her today. When I got there, she asked me for a breakdown of all my debts, and proceeded to tell me that they could consolidate all my debts for me with a loan on my account at just 9%. It all went through brilliantly, and the money will be in my account at midnight!

It is such a relief to be essentially debt free - no more credit card bills, no more car finance - just a direct debit to the bank each month, which works out as less than I was paying anyway!

It's the last step towards being completely debt-free and it feels GGGGRRRREEEAT!!! :j :j :j :beer: :beer: :beer:

climbgirl

Noooooo! It works out less each month, but most likely that's because it's over a longer period of time than your other debts. So you'll pay more in the long run in interest....

IMake certain that you chop up those credit cards you're going to clear with the loan so you can't make the classic consolidation mistake and run the debts up again.

LewisC_2

climbgirl wrote:

Noooooo! It works out less each month, but most likely that's because it's over a longer period of time than your other debts. So you'll pay more in the long run in interest....

IMake certain that you chop up those credit cards you're going to clear with the loan so you can't make the classic consolidation mistake and run the debts up again.

Not at all - I plan to clear it much quicker than the term of the loan, and have discussed that with the bank manager. In the long term, it still works out cheaper, as my other debts were at around 35%!

And don't worry - I shan't be using credit cards again!

D&DD

Hi Lewis I think the reason we panic when we read consolidation is because most of us here have one,two and some even three 'consolidation' loans.
I was in the same boat as you high rate cards and cursing how little I paid off each month due to the harsh interest rates..
I have just done the same and consolidated again BUT I am now older,wiser and a lot more savvy with money.I have no cards and I have actually upped our payments rather than decreased them each month,so the debt will be paid off quicker.
Please just be careful hun..I wish you well in your debt free quest

LewisC_2

Hi D&DD,

Yeah - I'm very wise with my money, and wouldn't make a move if I was going to lose out in the long run. Unfortunately, I only learnt about money once I had run up credit card debts! I'm one step closer to freedom now, and will endeavour to pay off far more than the regular monthly payment each month

lynzpower

I had this from my bank too. Whats the penalty for overpaying? Is there one?

I can see why climbgirl was alarmed its statements like this

It is such a relief to be essentially debt free - no more credit card bills, no more car finance - just a direct debit to the bank each month, which works out as less than I was paying anyway!

by the sounds of it, you are not anywhere near being debt free- as youve just taken out a loan?

LewisC_2

lynzpower wrote:

I had this from my bank too. Whats the penalty for overpaying? Is there one?

I can see why climbgirl was alarmed its statements like this


by the sounds of it, you are not anywhere near being debt free- as youve just taken out a loan?

Nope, no penalties at all. Discussed in full.

THE_LONE_RANGER_4

chop up your credit cards get rid of any overdraft facility, debt free you will be when you have cleared your now managable debt

iolanthe07

This is the trouble with consolidation. You're not debt free. You're debt postponed, and that's very different. However, if you are disciplined and have addressed the reasons for getting into debt in the first place, this may well be the answer for you. Good luck.

System

Good points and the most important thing to hoist in - and its been mentioned as well - do not run up more debt with that extra expendable income you have just acquired - believe me and others when we say 'been there, done that, bought the tshirt, took it back for a refund, got the refund and spent the refund on exactly the same thing'. Cut those cards up, hang around on these boards and continue to heed the advice that is offered. Good luck.

Broken_hearted

Been there done that now the loan is one debt among many and costing me the most.