Consolidating debts

dancingfairy

I'm not a a huge fan of consolidation loans as they don't address the underlying issue which is likely to be overspending. Sadly quite a lot of people come on here saying they've consolidated once, twice, 3 times or more and each time they get in a worse mess - some people then try and add it to the mortgage which leads to even more problems.
If you absolutely have got on top of the excess spending then a loan may be a possibility, subject to getting the bank's approval of course.
Best of Luck whatever you choose.
df

Tixy

bigturnip wrote: »

So the advice is not to take out a loan because the OP might run up debts on their cards again, but to take out a new credit card, most likely at a higher rate than the loan, and free up the old cards for new debts to be run up on. Sorry, but I can't see how that is good advice.

They might well not get a consolidation loan. They might get a new card at 0%. Which would be cheaper than a consolidation loan for that part of the debt. Clearly it won't work if the new card is not 0% (or low life of balance), which is why I said a 0% bt card.

And once you have a new card then you can often find it possible to get a 0% deal on a cleared existing card and shuffle debts so the most expensive cards are then on 0% deals. Once the shuffling is done of course he need to close any cards with no balances on.

This method can work out cheaper than carrying on as he is. And he may well struggle to get a consolidation loan (obviously difficult to tell without knowing full extent of debts and income etc).

I didn't say he would run up the debts again. I said consolidation loans were not well recommended on here because all too often people run the debts up again.

scott9678

It's difficult to know what to do for the best. I may max up one card which is offering a bt rate of 6.9% and do what some of you have said and throw any spare cash I might have at paying off what's left. I think though I may do that until the beginning of next year and then if I'm still in this situation take the loan option.