Advice please

Squidge123

I have a bad credit history but want to get an unsecured loan to keep all my debt payments in one place.

However because of my bad credit history I know that I will struggle. Does anyone know anywhere I could get a loan from?

redpete

I don't understand why people want to have all debts in one place, unless they are all in default and it would be easier to deal with one creditor than several. Understandable reasons for consolidating debt would be to 1) reduce the total cost of the debt and 2) reduce the monthly cost of the debt.

To partly answer the question - loans for people with bad credit history will be difficult to get at all and if they are available they will incur high rates of interest.

Tixy

Squidge - we need to know more about your situation to be able to give much advise.

What do you mean by bad credit - what is actually on your file? There is a big difference between a file showing a couple of missed payments and a file with several defaults and CCJs.

How much do you currently owe, and how much do you want to borrow?
What are you hoping to achieve? to reduce the total interest you pay? if so what are your current APRs on debts? or to reduce the monthly payment? if the latter and if you can't meet you current commitments it may be worth speaking to a debt advice charity instead rather than trying to get a new loan.

KingElvis

In a nutshell? no

DCFC79

redpete wrote: »

I don't understand why people want to have all debts in one place, unless they are all in default and it would be easier to deal with one creditor than several. Understandable reasons for consolidating debt would be to 1) reduce the total cost of the debt and 2) reduce the monthly cost of the debt.

I think the reasoning is that if say 4 loans were consolidated into 1 then the payments would be less so easier to manage but surely 1 is just extending the time it will take to repay the loan.

Firefox1975

Yeah, I think that is how the majority of debt consolidation is "sold" one "easy to manage, easy to afford payment".

I must admit - I consolidated all of my debt years ago and paid it all off, saving a few percent on the APR of credit cards. So the model does work.

BUT - I had to destroy all of my cards and change me lifestyle afterwards and its long haul - mine was 72 months to be precise.

consolidation is only the first step

Squidge123

I have little debts that I want to consolidate into one. I've worked out that it would actually work out better for me to consolidate because then I'm freeing up money that can be used to pay over the minimum payment on a loan.

Tixy

We still need a better understanding of what is on your credit file and how much you are looking to borrow.

Is the loan you want to overpay on your most expensive debt?

Squidge123

It would be used to pay my overdraft and a lot of my little debts (I say little they aren't large) but they're not little per se. I don't actually know what is on my credit file - I've never thought about checking partly because I don't know how.

Tixy

If you've not checked your file how do you know you have a bad credit history? Its what is on your files that is important as that is what potential lenders will see.

To get copies of your credit files have a read of this article (which explains the free trials and the £2 statutory reports) - http://www.moneysavingexpert.com/loans/credit-rating-credit-score#files

Squidge123

I know I have bad credit because my credit card has gone to debt collection and my bank won't give me an overdraft due to credit scoring.