Consolidation advice

MikeHartley

I would like some advice. To save a long missive I'll put in bullets:

• I have, according to Experian, a Fair credit rating, as although I have had no problems over the last 3 years (or more infact) such as late payments, defaults etc., my main issue is credit card debt on three different cards.
  
• I have no issues making my regular payments and have also recently had a pay rise of approximately 14%. My salary is c.£45,000. I've been with my employer for a number of years.
  
• I would like to consolidate this debt, either onto a 0% card (although the size in excess of £10k would make this unlikely) or onto a lower interest loan.
  
• I am aware that applying for more credit would be challenging and besides I don't want it.
  
• My question is this: can I apply for a loan or balance transfer agreement where, on acceptance, I can close down one or more of these cards automatically? This is, I think, the best way to convince a lender I am serious.

Thoughts most appreciated. If possible, I'd love people to skip the part about changing my lifestyle etc. I am (now) well aware of that and am most concerned about cutting the large minimum payments I have to meet.

DCFC79

Changing your spending will also help with paying the debts of earlier.

MikeHartley

Thanks for the reply. As I said at the end of my question, I'd love people to skip the part about changing my lifestyle etc. I am (now) well aware of that and am most concerned about cutting the large minimum payments I have to meet.

What I'm after is some expert advice on what I should do?

Tixy

MikeHartley wrote: »

.

• My question is this: can I apply for a loan or balance transfer agreement where, on acceptance, I can close down one or more of these cards automatically? This is, I think, the best way to convince a lender I am serious.

No. There is no way that a new potential lender can be certain that you will pay off x debts and that those accounts closed. The only exception is where the debt is already with the same lender.

So perhaps if one of your existing card balances is with your own bank they might consider a loan when others wouldn't, as to them the additional borrowing is only the amount owed on the other 2 cards, not the balance of all 3 cards. (I am not sure how well that is explained but hope it makes sense).

Is your main issue trying to reduce the interest you pay, or trying to reduce the overall monthly payment?

thehappybutterfly

Believe me Mike, every consolidator has every intention of clearing their debt and 'not taking on any more' - we've all been there and the lenders have heard it all before.

I'm quite certain that you mean what you say but it's a proven fact that consolidation rarely works - it usually results in even more debt.

Your best chance though is with the lender you have the most debt with. You never know....

ETA: I once consolidated and even got my lender to clear the debts themselves - I sent them the statements etc. What did I do? Oh yes, took on more credit with different lenders.

MikeHartley

Tixy wrote: »

Is your main issue trying to reduce the interest you pay, or trying to reduce the overall monthly payment?

Thanks for the replies.

The former - to secure lower interest amounts so I can pay down debt faster and more effectively.

Apples2

Why not run with an assumption further borrowing isn't happening for now?

If you managed before your 14% pay rise, you must have more to throw at the debt now. Target the card with the highest Apr and make minimum payments +£1 on the other two.

Once the first clears, it releases a lot more money for the second one so your debt clearance accelerates on the second and subsequent card.

With large debt over you, your chances of further low rate credit diminishes. Your risk is too high.