loan to consolidate????

f1slikki

looking to see if anyone can offer any advise, please.

I have racked up quite a bit on credit cards & overdraft debt and was looking to see if I could get a loan to pay these off and have just the 1 monthly payment,

I am managing to pay all my bills on time each month but it is mostly just interest therefore the total debt amount is never coming down, I dont have alot of spare cash to allow larger monthly payments and this is why I was thinking of a loan to pay them off that way the loan comes down each month.

the only concern I have is that my house is on shared equity, I own 75%,
is there any companies that would offer a loan to me...

thanks in advance....

DCFC79

How much debt do you have ?
How much do you earn ?

f1slikki

about £30k in cards & overdraft, (....i know...sorry)
earn approx £40k p.a

DCFC79

f1slikki wrote: »

about £30k in cards & overdraft, (....i know...sorry)
earn approx £40k p.a

Yes thats alot, so you want to get a loan of 30k to pay off the debts right but you have a salary of 40k. Im sure you can not borrow money which would double your debt so its more than your salary.

f1slikki

i'm not looking to double my debt the £30k would be to pay off an existing £30k but the only difference is that the existing debt will remain at £30k however long I make payments but the loan would come down, eventually....
does this make sense..

DCFC79

f1slikki wrote: »

i'm not looking to double my debt the £30k would be to pay off an existing £30k but the only difference is that the existing debt will remain at £30k however long I make payments but the loan would come down, eventually....
does this make sense..

So you want to borrow 30k to pay off the 30k debt right

As far as the lender is concerned tehy will just see it as the 30k being used for another splurge on stuff. Im not sure if telling the bank its a consolidation loan makes a difference, im sure someone more experienced will be along soon to provide more answers.

Tixy

Unfortunately the potential lender don't know that you will use the money to pay off your debts, or don't know you won't then run the cards back up again. So they look at your maximum potential exposure (that is that you could end up in £60k of debt, which would not be servicable on your level of income).

You've mentioned your house - were you considering a secured loan? Certainly fewer lenders will consider a shared ownership property, and obviously you'd need to have a fairly low LTV on the part that is yours.
But in general it is never advised to change unsecured debt into secured debt.

Perhaps try posting in the debt free wannabe section for ideas on ways you can reduce your outgoings by switching suppliers/getting things cheaper/ areas to cut back etc so that you can afford to pay a bit more to the debts each month. Maybe post up a statement of affairs for some suggestions?
Are you focusing on paying your debts in interest rate order so that you just pay the minimum to all but the most expensive, and pay as much as you can afford each month to the most expensive?

f1slikki

ah right. I see what your saying,

I was thinking that if its a consolidation loan then the lender pays the money direct to the creditor, like a balance transfer type of thing,

never looked at consolidation before, hence why I didnt follow,

thanks