consolidating debts - advice please

cpol

We currently have four credit cards, a store card, a catalogue and a personal loan which equal £18500. We need to seriously reduce our outgoings and thought about remortgaging however we are tied to our current deal until 2015 ( there would be a £3500 get out penalty ). I have contacted our mortgage supplier (northern rock) and have applied for a £18500 loan which would be at 9.9% and would seriously improve our standard of living. If we are succesfull with this loan application we are thinking we could maybe remotgage the loan and house in 2015 and get a lower interest rate.
If anyone could offer advice about our situation it would be much appreciated:)

27col

cpol wrote: »

We currently have four credit cards, a store card, a catalogue and a personal loan which equal £18500. We need to seriously reduce our outgoings and thought about remortgaging however we are tied to our current deal until 2015 ( there would be a £3500 get out penalty ). I have contacted our mortgage supplier (northern rock) and have applied for a £18500 loan which would be at 9.9% and would seriously improve our standard of living. If we are succesfull with this loan application we are thinking we could maybe remotgage the loan and house in 2015 and get a lower interest rate.
If anyone could offer advice about our situation it would be much appreciated:)

It might be more to the point if you reduced your standard of living a little and got yourselves out of debt.

CLAPTON

we need to know your full financial details before being able to give any advice

an SOA (income, spending, debt details is a good place to start)
try this format
http://www.makesenseofcards.com/soacalc.html

also you need to address the reasons why you are in such a large debt, as there is no point in consolidating debts if they are then run up again.

I would suggest you post over on the debt free wannabe board with the SOA details; lots of advice and support there

Muscle750

Plus your turning unsecured debt into secured, plus it will cost you alot more in the long run

DCFC79

Cant really add anything that hasn't already been said except do an SOA and go to the make sense of cards site. Your clearly spending above your means.

Ilona

The only way to seriously improve your standard of living is to knuckle down, stop buying stuff you can't afford, and throw every penny you have at the debts you already have. If you post an SOA on the debt free wannabe board people will come up with some ideas for you.
Ilona

AMILLIONDOLLARS

If you consolidate on the basis you describe, then you will have this new loan for the life of your new mortgage, which will work out to quite a chunky bit of interest, do you really want to do this? Best thing to do is to cut up the cards and snowball your repayments. This means first concentrating on the card with the highest interest rate. Throw every spare penny at it until it's cleared, then move on the next card then the next.....

As suggested look long and hard at your current spending habits, be brutal cutting back and start claiming for any PPI that you may have been talked into getting. Use any compensation you may get from this to reduce the outstanding balances, but above all DO NOT BORROW ANY MORE MONEY!!!!!!


AMD

ruky_uk

@cpol

taking out secured lending is risky compared to having unsecured. The worst the creditor can do at present is take County court action, if you fail to respoind/keep up with instalment order then ultimately they will want a charge over your property to secure the debt.

On the other hand if you consolidate your unsecured dbets to secured and then find you cant keep up with repayments - this could be due to your current financial situation, as we have no idea if you would be able to realistically afford and sustain higher payments each month - then thelender will take much harsher actions and can start repossession action depending on how much arrears you manage to get in to.

Securing debt is very serious and shoudl only be done after looking at your full financial situation.

The credit industry is having to tighten their belts now and actually look at individual circs (trust me when i say there are some creidtors that are still very menacing lol) but basically, if you wrote to all of them, explained your current situation and attached a copy of your income and expenditure they usually do accept reduced payments.

Ask them to freeze interest and charges and make small, sustainable payments that may take a long time to clear your debts but is a good starting point. This way you would still have multiple dbets, however they would still be unsecured and you would be slowly but surely paying them off.

If creditors first refuse your offer or dont freeze charges etc then dont give up keep trying. If a lot of interest and charges are accumulating, you have been in touch and kept records of letters/calls made then complain and take the matter further to the FOS if needs be.

Lenders should lend responsibly and help you when you are stuck - after all that is what tax payers have to do for them!!

As for ppl being judgmental about your living standards - that is only for you to know. There are ppl out there who have no choice but to borrow or who have had problems...doesn't matter how. What matters is what to do from here and try to stay away form credit so that you can work your way to a better and debt free way of living. Good luck.