Loans Advice - Consolodation

mcfc86

Hi all,

A bit of advice needed, currently have around £8,000 that I need to pay off, due to a mix of things, student account (for when I was at university) and also other credit cards.

The problem I am finding is that I have just moved to London and things are expensive here, however it was good to move to London as it is more in wages even if outgoings are a lot more and progression in my career.

The problem I am having is that currently I only pay the minimum amount on cards that I owe, problem with that is my interest then wipes out the payments I have made, so my accounts are never actually going down much if at all.

Last month I missed a payment, however I have paid this today to put everything back within my limits on my cards/money owed.

I applied for loans this weekends (before I paid off the outstanding payments needed on the one account that I had fallen by on) and it was refused (tried 3 loan companies).

I want to take a loan out for 6.1% (Sainsburys) and pay the £8,000 off over 6 years which is about £125 a month, which i can afford and it means interest won't be eating away at my balance (like it currently does).

Can any of you give me any advice on how to get a loan, as so far it has proved hard - no luck. I was thinking it might be due to me getting behind the payment on one account this month and this might of flagged it, however i have paid this now.

I'm renting in London and been with my current employer 4 months - it's a full time contract though.

Will I always struggle to get a loan for this amount and these circumstances? (On 24k per year).

Can any of you help/give me any tips, as it's really annoying me paying the minimum payments yet balances are not going down. I would rather pay off all my accounts via a loan and then just have one direct debit coming out for say £120-£150 a month over 6 years.

Thanks in advance.

bottleofred

Hi and welcome to the forum,

My advice would be not to try to consolidate the debt that you have, as debt consolidation rarely works and usually results in people eventually ending up in more debt! You should post your statement of affairs (there is a link near the top of page 1) and that way you'll get loads of tips/advice on how to save cash, which can then go towards the debts. You should only apply for 3 loans or types of credit within a 6 month period, as anymore applications start to make you look desperate to lenders. My advice would be to pay the most to the highest interest cards and then at least the minimum payment for the rest. Keeping up to date with payments is essential to build a good credit history.

Good luck

Red

mcfc86

bottleofred wrote: »

Hi and welcome to the forum,

My advice would be not to try to consolidate the debt that you have, as debt consolidation rarely works and usually results in people eventually ending up in more debt! You should post your statement of affairs (there is a link near the top of page 1) and that way you'll get loads of tips/advice on how to save cash, which can then go towards the debts. You should only apply for 3 loans or types of credit within a 6 month period, as anymore applications start to make you look desperate to lenders. My advice would be to pay the most to the highest interest cards and then at least the minimum payment for the rest. Keeping up to date with payments is essential to build a good credit history.

Good luck

Red

Hello,

Thanks you for your advice, the problem I am having is that I will only ever be able to pay the minimum amounts at the moment, these instantly get wiped out when the interest is due, therefore i am paying amounts to cut the debts, but then it doesn't actually get any lower?

rising_from_the_ashes

Agree totally with Red .... consolidation loans rarely work & most people end up with more debt.

I'm afraid you'd be unlikely to get it anyway:

• having 3 refusals on your report won't look good and will put other lenders off
• the late payment will put lenders off
• also important is your debt level to available credit level - what is the amount of credit you have available in total (ODs, all the card limits added up and anything else)?If you're using most of this amount, it will look like you can't live within the money you have available and is also very likely to make lenders less likely to lend any more.
• and probably most importantly, lenders won't look at the loan to clear your debts, as far as they're concerned they have no way of ensuring you do this so they will see if that you now have £16k's worth of debt. Add in that this is 50% of your salary and .... sorry but highly unlikely.

Pop up the SOA and I'm sure you'll get suggestions on what to tackle first / where savings may be possible

rising_from_the_ashes

Here's the link for the SOA http://www.makesenseofcards.com/soacalc.html

Debt-Free-Dave

mcfc86 wrote: »

Hello,

Thanks you for your advice, the problem I am having is that I will only ever be able to pay the minimum amounts at the moment, these instantly get wiped out when the interest is due, therefore i am paying amounts to cut the debts, but then it doesn't actually get any lower?

Maybe not. SOAs are really useful, and this community are experts in finding ways to save cash and pay off more debt as a result. Seriously, it is a bit of work, though could save you a lot of money in the long run.