Debt Consolidation : Yes or No?

MissH1988

Are consolidation loans a good idea? I have a poor credit rating thanks to foolishness with a credit card with a bill of £500 that I am currently attempting to pay off, but also owe £300 to a pay day lender which they will want back as a lump sum. I keep deferring this payday loan as I can no longer afford to pay the lump sum back. I am considering consolidating this £800 and just making one payment every month from now on.

I recently crashed my car, which is absolutely essential to my job, which has now added to costs. I just don't know how I am going to afford everything and it's starting to scare me a little! Any help would be greatly appreciated!

grey_lady

nope, awful idea -

MissH1988

Should I just keep paying the debts separately? I am considering approaching my bank about a loan for a car, but with my credit rating I can't see them being too willing? I thought if I explained my situation they could talk me through my options, or will they just tell me where to go?

HappyMJ

Fixing the car to be able to continue working is a valid reason to borrow money and if you can wrap the payday loan into it then it may be a good idea.....but...and it's a big but...DO NOT take out another payday loan EVER...

InsertWittyName

HappyMJ explained it well.

It's never a clear yes or no either way as to whether consolidation is a good or a bad thing.

I consolidated last year, but only to lower the APR I was paying on my debts by a massive amount (good thing). Consolidating so you can borrow more or 'spread the payments' is a different story (bad thing).