Advise needed for £12k loan.

nikmondo

Hi,

I have numerous loose ends I need to tie up which include the usual loans, credit cards, overdraft and store cards etc.

My credit rating is good (so credit expert say) 940/1000 and i'm just keeping my head above water by paying all the loans, OD, CC's and SC's on time.

Trouble is that I have no spare money for anything else ie new or newish car or a nice holiday.

My outgoings for the above is around £400 p/m but I thought if I got a big loan to pay all these off then I could probably save around £200 a month, though this will take another 2-3 yrs to pay off which is the draw back.

My debts so far:

Loan 1 - £8000 - Current status - £6306 Paying P/M - £157
Loan 2 - £5000 - Current status - £2315 Paying P/M - £90
SC 1 - £1243 - Current status - £1143 Paying P/M - £51
SC 2 - £1000 - Current status - £296 Paying P/M - £54
CC 1 - £1000 - Current status - £1000 Paying P/M - Various (£20 - £50)
CC 2 - £1000 - Current status - £900 Paying P/M - as above
OD - £1200 Paying P/M £200 (knocking £200 off OD each month)

total = £12960

So that's the damage!! Do you guys advise me to carry on the way I am and little by little my debt will free up, or get the one big loan (12kish) and have the one monthly payment which will make life a bit easier but will draw my debt out an extra 2-3 years??

I know there are sites were if you have bad credit then they'll get a loan so all debt can be payed but with high interest. My credit rating is good I should get a loan no probs right?

Can anyone suggest a site that will help me get a loan with good interest rates (not the ones where you input the info yourself i.e uswitch or moneysupermarket) but an actual company that search for you.

thanks for your help,

N

Rafter

If you are struggling to keep up with payments then, already have two loans, 2 storecards and two credit cards then unlikely lenders are going to be falling over themselves to lend you money.

Not wanting to be harsh, but should you really be thinking about a new car and expensive holiday if you are already in a lot of debt.

Presumably the debts on store cards and credit cards are for clothes, and other stuff that isn't going to last that long. By paying off the minimum balances you are still going to be clearing this debt in 20 years time, long after the stuff has been thrown away.

If you do consolidate, but please don't spread it over any longer if you have to and cust up your store and credit cards to avoid getting in any deeper.

All the companies that search for you are hoping you will sign up to a secured loan with expensive PPI that will earn them £1000's in commission. The money to be made on a cheap, good value personal loan is so small it is not worth their while.

My advice:

1. See if you can get a 'life of balance' transfer credit card to transfer your storecards too - but I think you will be declined.

2. See whether one of your current loan providers or bank will give you a £2000 loan to consolidate all your card debts, repay your overdraft etc.

3. Destroy all but one credit card and only use that for emergencies.

4. Have a modest holiday.

5. Buy a new car is 2-3 years time once your debts have come down a bit.

It is amazing how much faster you will be debt free by paying off credit cards faster and getting your overall interest rate down. Taking on more debt is not the answer though in my view - sorry.

R.

nikmondo

I feared that someone was going to say that!!

The story goes that I lived at homes up until Jan last year where me and my fiance moved into a flat. everything was getting paid but i was having to use credit cards for extra cash as money was so tight. This is where 2k from credit cards have come from + X'mas.

I have moved back home now so I should be getting back on my feet soon though it's still bloody hard. And believe me i'll never purchase clothes on a credit card!! The 2 store cards are for a pair of sofa's at DFS (bought for the flat) and a laptop which is nearly paid of which I bought nearly 4 yrs ago.

My fiance doesn't work full time as we have 2 yr old child which didn't help.

Rafter

Nik,

Sorry to hear about your situation and thanks for taking my advice in the spirit it was intended.

A credit rating measures how reliable you are about paying existing debt and whether you can be identified on the electoral roll and other factors. It does not know your income, so cannot possibly measure how much additional debt you can afford to take on.

Seeing if you can get your current cards onto a loan is a good move, if you will be reducing the overall APR. You should really try not to just spread it over more years though - otherwise you aren't going to be able to move back out and get your independence as fast as you might like.

Suggest you try the debt free wannabe board and see how you can cut your current outgoings further. Worth having a rummage through any stuff you do own to see whether you can raise a few quid on ebay or from trade ins? Old DVDs and computer games perhaps?

A budget would be a good idea too, so you know exactly where you are and don't get lured into spending more, just because someone is offering you credit.

Good luck.

R.