How can i consolidate mine and my partners debt to pay less interest?

sophpac

Myself and my boyfriend have several debts between us and are currently paying interest on them all. We're both paying some off monthly but realise that alot is being eaten up in interest and it just feels difficult to manage them separately. We'd like to either get a loan or a 0% interest credit card to cover the debts and have 1 to pay off monthly. Our debts include:

Overdraft: £2000
Overdraft: £1400
Credit card: £1000
Argos store card: £300
Total: £4700

We worked out that we're paying around £80 in interest each month. What's the best way forward? We can pay off £250 a month. I'm not sure if you can get a credit card where you can transfer money to pay off an overdraft?

Thanks for any help you can give!

AMILLIONDOLLARS

First of all consolidation is a very bad idea.

Why don't you post a Statement of Affairs on here, then everyone can take a look and advise you on how best to save money in order to pay down this debt.

Have a look at the link below:

http://makesenseofcards.com/soacalc.html

RAS

^^^^^
What she says. Consolidation does not work.

Which debt has the highest APR?

sophpac

I tried the Statement of Affairs... can't copy and paste it on here, how can i do this??

Why is consolidation a bad idea? I feel like it would help to have 1 debt rather than 4?

Thanks!

RunbeforeIcanwalk

sophpac wrote: »

I tried the Statement of Affairs... can't copy and paste it on here, how can i do this??

Why is consolidation a bad idea? I feel like it would help to have 1 debt rather than 4?

Thanks!

When you copy and paste it copies the link that as a newbie you are not allowed.. Once it is on here still editable, scroll right down to the bottom and remove the WWW make sense of cards. link. Then you can post it. I learnt this yesterday

Good luck.. and I agree with above. Consolidation is not the way to go. Been there done that got several t shirts!

mildredalien

Consolidation often leaves people with 'empty' credit cards or overdrafts but still no real handle on how much they are spending each month or where the problems in building debt are - which mean that over time the temptation to spend more on those cards or reach back into your overdraft can lead to even more debt.

It CAN work - if you get rid of all other avenues of credit and are very sure about how you can live within your means until the consolidated debt is paid off.

Also something to think about - whose name would the loan be in? They would be taking responsibility for all the debt so would have to be sure they could manage that.

bargainbetty

The best plan for the overdrafts is to focus hard on cutting your expenditure. When you each get paid, call the bank and ask them to reduce your overdraft by £100. Or £50. Whatever you feel is reasonable. Then live within in.

If you get a loan, your debts are not evenly split so one of you will be paying towards the other. If you break up, one of you could end up stuck with all of them, even if it is in joint names - debt collectors will go after whoever they can get.

If you pay off the overdraft and don't reduce it, you will end up spending it all again. Same with the credit card. I did it twice. Focus on bringing down your spending first - get that under control.

Having one debt rather than four only helps if it doesn't cost you more or put you at risk. Better to pay them all off a bit at a time.

Good luck

RAS

Also having 4 debts means that you can pay off the most expensive and let the others tick over.

As a rule taking out one loan costs more than payign off 4 debts even at lower APRs.

Check the snowball on www.whatsthecost.com

Do you understand joint and several liability?

If you get a joint loan, you personally are responsible for paying back the whole £4700, not "your half". As is your BF.

If either of you fails to pay their contribution, the other is stuffed.

paulmapp8306

If you can get a 0% card, then thats worth it actually. Move your current CC and Argos accounts onto the new CC. CLOSE BOTH ACCOUNTS (not just cutting up the cards).

That will take the interest away for those debts for now - so just pay of the minimum from then on. Use any money you have to start getting the OD down.

That will handle the debts as best you can - BUT you must also tackle the reason why your in debt or you will just find other credit, or use the new C to its limit (which may be more than the £1300). Posting an SOA here for advice, and keeping a "spending diary" will help a lot with that.


If you find a Cc with 0% on transfers for 18 months you should do fine. At £250/month is will take 14 months to clear the overdrafts (give or take depending on interest) and the other 4 months will clear another £1000k off the new card. hopefully that leaves you a max of £300 when the interest does kick in. Im pretty sure you can save more than that over that time frame once you have posted your SOA for folks to look at.

DVardysShadow

sophpac wrote: »

I tried the Statement of Affairs... can't copy and paste it on here, how can i do this??

Why is consolidation a bad idea? I feel like it would help to have 1 debt rather than 4?

Thanks!

http://www.makesenseofcards.com/soacalc.html

When you have filled it in, click 'Calculate' on the Statement of Affairs form, click 'Format for MSE'. This gives you a popup window. Click 'highlight text', right click on the highlighted text and copy the highlighted text including all formatting codes. Paste the copied text into a post for other posters to comment

[This ought to be in a sticky?]

System

mildredalien wrote: »

Consolidation often leaves people with 'empty' credit cards or overdrafts but still no real handle on how much they are spending each month or where the problems in building debt are - which mean that over time the temptation to spend more on those cards or reach back into your overdraft can lead to even more debt.

It CAN work - if you get rid of all other avenues of credit and are very sure about how you can live within your means until the consolidated debt is paid off.

I agree with this. I consolidated for the first time 5 years ago. Left me with a few credit cards with loads of credit on, which I then continued to spend on. The result? £27k of debt.

However, it CAN work if you're in the right frame of mind to do it and are 100% sure you will not start spending on the credit you have freed up by consolidating. On my second time around consolidation has worked very well for me and I am saving £200 pcm in interest charges.

Only consolidate if you are VERY sure you will close all other avenues of credit down to avoid the temptation of spending again.