Debt/Loan Advice needed

gettingwed

Hi all

I've been lurking for a while, but now need some advice.

I'll explain my situation.

I earn a reasonable salary, but get - most of the time - excellent quarterly bonuses that have allowed me to live comfortably for the past few years. However, various circumstances at work this past 18 months have meant that for about a year we haven't seen any extra money over my basic salary, and (foolishly) my spending habits have not until recently changed. I have about £2000 on one credit card, and £2600 on a Morgan Stanley credit card that is interest free until the end of August this year. My monthly budget means that on my basic salary I have only £200-£300 spare each month, which generally goes on trying to battle down the credit cards.

Now, circumstances at work are changing, and it seems that the bonuses are likly to start again at the end of the year. However, I am getting married in May next year, and this is going to cost me £10k-£12k. I know, I know... but it's the wedding we both want.

So, my idea is this. Get a loan now, one that will pay for the wedding and clear the £4600 I owe on credit cards. After all, it seems stupid to pay 18% interest or whatever my credit card rates are on nearly £5000 when I can get a loan for a fraction of that rate. If all goes well, with the bonuses from next year I might be able to clear that debt in it's entirety.

So, when I've been looking at loans (and admittedly I don't know what I'm looking for) it seems that they are all fixed term loans (which I hate the idea of - borrowing a fixed amount for a fixed period, and then paying back a fixed much larger amount, regardless if I can pay it off earlier or not).

Are there any loans that will suit? Am I going about this the wrong way? Any advice?

Many thanks for your help!

lynzpower

So, my idea is this. Get a loan now, one that will pay for the wedding and clear the £4600 I owe on credit cards. After all, it seems stupid to pay 18% interest or whatever my credit card rates are on nearly £5000 when I can get a loan for a fraction of that rate. If all goes well, with the bonuses from next year I might be able to clear that debt in it's entirety.

So, when I've been looking at loans (and admittedly I don't know what I'm looking for) it seems that they are all fixed term loans (which I hate the idea of - borrowing a fixed amount for a fixed period, and then paying back a fixed much larger amount, regardless if I can pay it off earlier or not).

Are there any loans that will suit? Am I going about this the wrong way? Any advice?

Many thanks for your help!

I fear you are going about this completely the wrong way.

You are taking on debt in ANTICIPATION of what you MIGHT earn.

TYou muight not earn that then where will you be.

if you have not managed not to learn to not spend beyond your means now (as you openly admit) then I just cannot see the logic at all sugar in getting into MORE debt when your salary may not be going up at all.

my oh is on a bonus salary- nothing is guranteed, some months and even years go by with bonus.

I think this is a very risky venture indeed, and I dont recommend it.

Could you not put off the wedding until youve saved for it. those bonuses could then be put towards the wedding

Ytaya

:hello: hello!

Consolidation almost never works. People consolidate credit cards debts into a loan, then wheeeeeee spend on the credit cards again. Check my sig and guess how I know this

What you could do is post your Statement of Affairs (see this post for first timers). We can help you identify areas where you can change your spending habits and get you living back within your means. We can also advise you how best to tackle those debts.

I would strongly advise not borrowing against potential future earnings. I would also suggest finding a wedding that fits your budget rather than struggling to afford something else. There's been plenty of weddings here on MSE, we can surely offer you some advice on that front, too!

Jolinar

Totally agree with the above, Myself and OH consolidated our way up to 66K worth of debt at it's highest. Never again it's not worth it, no matter what the reason.

youngandreckless

While I agree with the posts above (and I'm a prime example of consolidation gone bad) if you decide to go down this route anyway have a look at egg. This is the main one I know you can overpay etc.