are we doing the right thing?

zipwen1

hi all,
at the moment we have 25,000 of debt
10,000 left on a halifax unsecured loan at 7.9% payment of £300 till sept 2010
and 15,000 split between 3 credit cards all of which are now at top interest rate 0f 15%-16.5% paying around £250 altogether.

the credit cards arent coming down at all and we feel like it will be years and years before we eventualy pay them off, so we want to get rid of them now.

we have been offered 26k secured loan by first plus at 7.9% for 6 years (they tried to sell us ppi, but we aint taking it even though they said we would get 6 grand back after 5 years, scared there will be a huge catch with that)
the payment would be £440ish so a lot less than we are paying out at the moment, and atleast with this we know that after six years it will be finished with unlike the credit cards.

are we doing the right thing?
we have learnt our lesson with the credit cards so there is no danger of us getting into this mess again

lynzpower

I wouldnt ever secure debt.

can you not move your credit cards to low APRs.

Even moving them to a lower APR unsecured loan would be better.

have you seen how much you pay back onthese over time. Its about 16 grand interest on the picture one they show on telly

zipwen1

unsecured are all 11%

and we would be paying back i think between 430 and 440pm so we would pay back around 31k
tried to get more credit cards but no luck

RAS

zipwen1 wrote: »

unsecured are all 11%

and we would be paying back i think between 430 and 440pm so we would pay back around 31k
tried to get more credit cards but no luck

Would not recommend consolidating into a loan at all. And cetainly not to secure it.

Would suggest you go to southernscousers stickie at the top of the baord and post up a Statement of Affairs. The people here will be able to help you find a way through this situation.

And as a first port of call, get your credit reports, so you knwo what is sitting there.

zipwen1

we were told by first plus and our bank that we had good credit so dont understand why we cant get anymore cc'ds. we dont really want to get anymore anyway becouse we dont want to be applying for them every time the 0% interest stops.
we just want one loan with one payment so we dont have to worry about this anymore
we have been offered a loan by our bank unsecured for 11% and im starting to think this may be the better option as i have only just realised that the first plus rate is variable

taxi73

Hi there ..it may be the number of credit searches on your file that's stopping getting you the cards..have you done more than 2 in 6 months?
I don't think first direct are the right people to go for nor securing a loan on your property
11% at your bank is very high as well....I would say it's the better option but will you be guaranteed not to use your cards
Maybe posting a SOA we can find some cut-backs for you which may allow you to pay more off your debts.This is more sensible than a consolidation loan but obviously the choice is up to you.

RAS

Zip

It will not go away if you do not worry about it.

For some reason, you are spending more than you are earning and collecting debts. That needs to be addressed whether you take the loan or not. Otherwise, you will just be looking for another loan, at a higher rate in another year or two.

If you address the underlying issue, you may be able to get a decent low interest card in the future, and be stuck with a loan at a higher rare that you cannnot pay off.

You do not have to post a SOA, but it really helps people to advise you better. It is like having a collective bank of knowledge of good value for just about everything.

It may als hlep you to both keep Spending diaryies for a couple of weeks, so you know where it is going. My 1.55 coffee costs £340 a year, for instance.

zipwen1

we earn 2400 a month ( i only work part time at the moment)
725 mortgage
300 loan
250-300 cc
99 sofa
75 service charge
112 council tax
90 water/electric/gas
20 life insurance
26 phone/Internet
80 mobiles
20 contents insurance
50 car insurance
30 petrol (only used at weekends)
100-150 food (only me to feed during the week partner gets expenses)

the reason we have so much debt is because we have been stupid in the past and bought holidays and all sorts on the cc's and loan instead of saving up for it at the time. we just want to sort it out now and get rid of the cards i know we can afford to pay more off the cc's but i just think it would make better sense to get the loan and half the interest we are paying and have a light at the end of the tunnel. i just know if we keep the cards the temptation will still be there for my bf to say sod it lets go on holiday just put it on the card and i really dont what that. i am 100% aware of the danger of credit and so is my boyfriend until he sees something he wants, if the cards are no more he will have no choice because i control the money now nothing comes out of the bank without my knowledge

I_was_a_fool

Hi zipwen1

I have a first plus loan (waa) and it has gone up twice recently. The massive catch with the ppi is they add it to the loan and then charge you interest on it for the full term of the loan.

Have you thought about a dmp (debt management plan)? Have a look at the CCCS and Payplan websites, there is good advice to be had there. Consolidation seldom works and the debt creeps back up again, I know as I used to be a serial consolidator!

mo1_2

hi,credit cards are the worst thing anyone can use,i should know i got into so much debt,and they wont go away,but if you cant pay the ones you have got,dont get any more

zipwen1

ive spoken to my boyfriend and he seems to think that the rate for the fist plus loan was fixed as she gave him a figure for the total amount that we would pay back, looking at the website though it dose say variable, are all secured loans variable or can some be fixed?