Should I Get a Loan to Consolidate?

weller01

Am not that strong on personal finance and would appreciate a bit of advice.

I have two credit cards that total £13k although the interest rates are high and am wanting to clear them. I tore the cards up a while ago and have only minimal credit available but that is good to me as I don't use them! I have a fixed rate loan that has about £8500 left. I earn a decent salary (in excess of £70k) and am keen to consolidate. If consolidating is not a good idea I am keen to sort out the credit cards at least as one is with MBNA and the minimum payments have gone up and this card has £11k out of my £13k debt on it.

Any ideas? Would I not be better getting a loan for £13 to clear the debts?

Thanks

HappyMJ

weller01 wrote: »

Am not that strong on personal finance and would appreciate a bit of advice. In that case I'd say no.

I have two credit cards that total £13k although the interest rates are high and am wanting to clear them. I tore the cards up a while ago and have only minimal credit available but that is good to me as I don't use them! I have a fixed rate loan that has about £8500 left. I earn a decent salary (in excess of £70k) and am keen to consolidate. If consolidating is not a good idea I am keen to sort out the credit cards at least as one is with MBNA and the minimum payments have gone up and this card has £11k out of my £13k debt on it.

Any ideas? Would I not be better getting a loan for £13 to clear the debts? You may be but as you aren't strong on personal finance how will you tell if a long term loan despite being cheaper monthly will actually be cheaper in the long term.

Thanks

You need to think about it...learn a bit more about the interest rates and then make a decision.

weller01

Thanks - I need to do some research! My main thing is to get down the MBNA card as I want to clear it. Unsure as to whether cheap balance transfer is the way.

backinbusiness

I'd also recommend analysing why you have so much debt on credit cards.

Is it long-term living beyond your means? Life circumstances changing?

Until you identify this, there is always the possibility of building up debt again whether you consolidate or not.

The general rule here is not to consolidate for that very reason - you end up with a consolidation loan and maxed out credit cards.

Perhaps post up your soa and see if you can trim your spending instead?

Good luck though.

BiB

weller01

Thanks - life changing circumstances!! I am keen to address this and be debt free of cards asap!!

backinbusiness

weller01 wrote: »

Thanks - life changing circumstances!! I am keen to address this and be debt free of cards asap!!

Sure - been there done that. Didn't mean to be nosy.

Post up your soa and let us rip it to bits!

BiB

(Just noticed your other thread where Tesco Loans couldn't help you out. There must be something on your credit file already affecting your creditworthyness. I think a decent loan at a decent rate may not be an option for you at this time)

drewdrop

Hi, beware the usual trap of running up the cards again and then being left with both loans and cc payments, a mistake I have made several times prior to my LBM xx:o

mustang1

Difficult to comment without the card APRs being posted but I've always found when you have a loan with fixed payments, it's all it too easy to get more credit card debt. Maybe time to tackle those cards and increase from the minimum payments as an incentive to clearing the debt. Post your SOA and people can help you work out where you can cut back.

wigwam

mustang1 wrote: »

I've always found when you have a loan with fixed payments, it's all it too easy to get more credit card debt. Maybe time to tackle those cards and increase from the minimum payments as an incentive to clearing the debt.

Oh how true this is... never thought about it that way despite consolidating previously(twice!!) and both times ending up in the same mess