advice please on consolidating debt

nicnicj

hello..

well have got myself into a financial nightmare... after taking 4 years off work and retraining my husband and I are about £20k in debt with 9 different credit cards. we also have £8k outstanding on a car loan (2 years left to pay)
we don't have any problems paying minimum payments each month but the debts are not going anywhere as the interest is starting to kick in.
After spending an hour and 15 mins on the phone to my bank today to the loan dept and the mortgage dept we can't get any help from them as the amount we want to borrow to consolidate our debts is too high and we don't earn enough to increase our mortgage. My husband earns a lot in overtime but they won't take this into consideration. we earn about £60k between us gross.

Any advice as to what options are now available to us please???

DCFC79

nicnicj wrote: »

hello..

well have got myself into a financial nightmare... after taking 4 years off work and retraining my husband and I are about £20k in debt with 9 different credit cards. we also have £8k outstanding on a car loan (2 years left to pay)
we don't have any problems paying minimum payments each month but the debts are not going anywhere as the interest is starting to kick in.
After spending an hour and 15 mins on the phone to my bank today to the loan dept and the mortgage dept we can't get any help from them as the amount we want to borrow to consolidate our debts is too high and we don't earn enough to increase our mortgage. My husband earns a lot in overtime but they won't take this into consideration. we earn about £60k between us gross.

Any advice as to what options are now available to us please???

1. forget the consolidation idea as unlikely to happen since your own bank wont contemplate it

2. make cut backs from mobile phone bill to grocery shopping

3 better still, complete an SOA and post it here will take care of number 2, the posters on teh DFW board will look at the SOA and give you tips what you could cut down on.

4 be honest when filling in the SOA

the SOA is linked to in the reply by claptopn here

yangptangkipperbang

DCFC79 wrote: »

1. forget the consolidation idea as unlikely to happen since your own bank wont contemplate it

2. make cut backs from mobile phone bill to grocery shopping

3 better still, complete an SOA and post it here will take care of number 2, the posters on teh DFW board will look at the SOA and give you tips what you could cut down on.

4 be honest when filling in the SOA

the SOA is linked to in the reply by claptopn here

The FIRST No 1:

CUT UP THE CREDIT CARDS - NOW !

DCFC79

yangptangkipperbang wrote: »

The FIRST No 1:

CUT UP THE CREDIT CARDS - NOW !

Ah yes the most important step in the process

thnaks

nicnicj

tbh i haven't spent on the credit cards for a long time apart from to buy my car (cost £3200) last year.
the rest is balance transfers from when I took time out when my children were born to be a SAHM (wasn't cost effective to go back to work either as childcare for twins is sooo expensive!)
and from when I retrained.

so the only credit card we use is for shopping which we pay off each month.

poppy10_2

nicnicj wrote: »

tbh i haven't spent on the credit cards for a long time apart from to buy my car .

So, cut them in half.

Keep one card with a low maximum balance to do your weekly shop with.

If you have the other cards, the temptation is always there to spend on them, especially if the balance gets cleared by a consolidation loan.

zaffyro

Easily, the problem and the more urgent aspect of your debt is your credit card exposure. You may have to work on your numbers and see how you can cut down on the principal instead of just paying up on the interests. It would not be wise to just go for the minimum monthly payments as this would only be applied on the interests and not on the principal.

CLAPTON

you have 28k of debt and income of 60k
you are very unlikely to get a large loan with that debt to income ratio
(so if you wanted to borrow 20k the bank would see total debt as 28k + 20k = 48K even though you know you will only be transferring debt you don't have too)

so you need to look at the details of your debt (amount APR and monthly payment)

-concentrate on paying as much as possible to the highest APR debt
-pay a little more than the minimum to every CC as paying the minimum is recorded on your credit file
-if you have an OD get rid of that first as that is generally seen as people in financial trouble.
-consider piecemeal ways of reducing the average APR i.e. BTs or smaller loans and pay off the CCs with the highest APRs

if you are paying as much as possible towards the debts then it makes sense to retain the CC as you will presumably have no emergency funds.