Need advice on best way to repay / What product to apply for

Struggling-one

I'm currently in approx £15k of debt which is spread across credit cards, one loan and an overdraft of £2,500.

I'm in my first (mortgaged) home and have been for 3 years now, the monthly payment for my combined credit is very high and although I get by its a struggle and it seems to be getting worse (the fee for use of my overdraft doubled in the past few months).

I think my best option would be to get a debt consolidation loan but I have applied for these in the past and been refused, I have had a lot of different types credit in my life and never missed a payment so there should be no problem with that side of things I think the lenders are just looking at my outstanding debt (even thought I want the money from them to consolidate it) and refusing because of it - maybe I'm wrong though!

I was considering joining a credit union and applying through there but as far as I can understand it you need to have saved with them before you can apply, I'm not sure of my chances either as a loan of £15k seems a lot.

Any advice on my best place to start is welcome and thank you in advance.

Thrifty_Pixie

hi and welcome!

most people here will advise you NOT to take out a consolidation loan, even if you could get one. and i'm one of those people. oftentimes it doesn't work as, without addressing the reasons why you're over-spending, most people just end up with a hefty consolidation loan and need to take out other credit to live day to day. trust me, it happened to me and many others.

if you've been refused already it's probably because they're taking into account the loan you're requesting - say, £15k - PLUS the debts you already have, and think that £30k is a level of credit that your income just cannot service. look at it from their point of view...they have no guarantee that you'll actually use their loan to pay off your debts and close those accounts do they?

my suggestion would be to budget, and budget hard. fill out an SOA (statement of affairs - which can be found on one of the beginner stickies at the top of this forum) and post it here so people can give you some tips on how to save money. then throw it all at your debts as fast as you can

Tixy

Hi

Credit unions generally only lend relatively small amounts to their members. Often the first loan is limited to twice what you have saved with them or £1000 or similar. The small number of CU that do larger loans generally will have the same criteria as banks in terms of considering your affordability.

As Thrifty Pixie says I would also recommend you complete a detailed statement of affairs which is basically a list of your income/outgoings and details of your debts - see here - http://www.stoozing.com/msoc/soacalc.php

As consolidation is not an option - given you have been refused then instead you might want to look for other ways to make repaying your debts easier. These could include finding savings that you can make to your outgoings by getting things cheaper / swapping suppliers / cutting back etc and also seeing if you can move any of your current debt around to make it cheaper (e.g. possibly a 0% balance transfer card for some of your card debt, or maybe seeing if you could possibly find a cheaper overdraft provider etc).

If you post the statement of affairs results on here people may be able to help you find some alternatives to consolidating your debts.

Struggling-one

Thank you both for the advice, I'm going to get the details for the SOA together and post here once completed.