Are we doing the right thing?

loobie

Have just worked out our total debt. Am disgusted with me and dh. Me being a temp doesn't really help, and am job searching every day to find something permanent.

Have just contacted "loans.co.uk" to see about a loan to consolidate everything. Rough monthly payment over 5 years will be between £150 and £200 per month, and we pay £174 at the moment on minimum payments. Plus the apr would be around 10.9%, lower than our lowest credit card at 14.8%. There is the capacity to over pay and repay early, so once I am back in work, that could be done too.

Just a bit bothered about taking out more money to clear debts. Mind you, at least we'll be able to only have one payment, and not 7!

I wanted to be debt free by August, but without a lottery win, that's never going to happen!

LewisC_2

Hi loobie,

£6k isn't too bad in the grand scheme of things, seeing as you're both employed. The good people here will help you get that down in no time

Can't really advise about the loan as I'm not sure myself, but will be checking this thread to see what the general consensus is, as I'd like to find out too! (Not for getting a loan - just out of interest!)

warburtonrichard

Well if all of your APRs are higher than the loan, it sounds like not a bad solution... but don't forget to cut your cards up and cancel the accounts, reduce your overdraft limits and stick to the DFW ways!

dancingfairy

Hi Loobie :hello: A lot of people on here advise against taking out debt to repay off debt and people seem to come on here having consolidated 2 or 3 times and ended up in a worse situation than before- plus you are paying out more money in the long run.

Congratulations though on facing up to your problems. Can you post an SOA up (see Southern Scousers sticky) and we'll see if we can trim any money off them and with a bit of work hopefully we can help you pay off your debt without resorting to getting another loan.

Another good thing to try is to keep a spending diary so you can see where all those odd pounds are going - a pound or 2 here and a pound or 2 there- it all adds up adn it's scary seeing well buy a sandwich and coke everyday adn then there's the coffee and the paper o nthe way to work etc,etc.

All the best with it all.

tiff

Could you not get an M&S card and balance transfer a lot of that onto it. Their rate is 3.9% for the life of the balance transfer.

climbgirl

DON'T CONSOLIDATE! You will ending up paying a lot more in the long-run, because although your monthly payments will be lower, you'll take a lot longer to pay off the loan and you will pay a fortune in interest. Which I can imagine will be very high from an outfit like the one you've mentioned....

And once you've taken out the loan and cleared the credit cards, there's nothing to stop you putting more debt on the cards again and you'll end up with card debt and the consolidation loan.

Don't do this, you're making a classic mistake that many people on this board have made. DON'T CONSOLIDATE!

Post a full SOA with all incomings and outgoings, all debt totals and interest levels. People here will help you to cut back and prioritise debts.

Sea78

Hi
I would also be weary of taking out a loan - a low rate CC is a much better idea as you still can pay little bits every day if you wish - and I took 3 loans out to consolidate (first time for £10,000, then another £10000, then another £8000 plus more on the CCs and now am here!).
Sea xx

angelavdavis

What aprs are you paying? Why not phone up your credit card companies and say you are thinking of switching your card to a more competitive company - unless they can give you a better rate of course? (they can only say no).

If its a no, see if you can switch to a lower rate life of balance or 0% and start chucking everything you have spare at them!

helping_hubby

I have another vote for not consolidating. Unless you think you can be really really strong there's the risk of building up the cards again.

I also think the paying off one card at a time adds to the satisfaction of clearing the loan and also motivates yourself to clear it asap.

You should read the articles on credit card shuffling and 0% balance transfers.

My hubby had 6 credit cards, one was empty (it was 1 of the 2 I knew about and I had helped him clear it a few months prior to finding out about the rest), anyway, called the empty card up and they had a 6.9% life of balance rate for transfers, so we've move 4k onto that (from a 19% card). So that's one method you can try if you get to the problem of not being able to get new cards.

helping_hubby

Balance transfers: http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1107182516,76509,

Credit card shuffle:
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1102335753,51771,

Oh and yes, do try phoning to see if they will simply lower the APR.

loobie

We don't have a very good credit record - I think the technical term is "needs improving". Hence going for a loan. Unless you know of someone who can manipulate the records at a credit reference agency (JOKE), then i can't see another way out of it.