In debt a few cards and loan total 20 k -advice

Moneymaid

Hi all am in a money pickle and need advice. Dont want to go down the route of going through credit agency so thought I might amalgamate all my debt to one loan and pay off over 6 or 7 years total about 500 pds a month . I can manage this at the moment as I am living low rent and but will at some point need a car so will need some money another day . Was wondering if this was the best way of doing this? Or possibly 15k loan and 5k on balance transfer to 0% interest and keep shifting . All input welcome. Thanks

[Deleted User]

How much do you earn per year and what is the total value of all your debt? You'll find it difficult to get another loan (even if it's for consolidation purposes) if your total debt is equal to your salary.

DCFC79

citricsquid wrote: »

How much do you earn per year and what is the total value of all your debt? You'll find it difficult to get another loan (even if it's for consolidation purposes) if your total debt is equal to your salary.

Reading the Thread title the amount owed is 20k but could be wrong.

OP consoidation rarely works, you need to have the determination to not go and spend on the card again.

Other thread on the BR board here

Moneymaid

The total loan at 20 k is not my annual salary which is 32 k . I rarely use the cards now so living within my means but just poorly managed by me. Any other suggestions?

DCFC79

Moneymaid wrote: »

The total loan at 20 k is not my annual salary which is 32 k . I rarely use the cards now so living within my means but just poorly managed by me. Any other suggestions?

You might be lucky to get a loan, the current debt is more than half your salary which could be the stumbling block.

CKhalvashi

The cheapest way to do this may be to chuck minimum payment + £1 at everything (plus loan payment), then put anything over your budget at the highest rate debt each month.

If you can cut this down by £6000 (as you say) this year, you may be able to consolidate at a better rate next year, but you do need a history of the total debt going down each month.

Put the cards in a safe/with parents, and think 'Can I afford this?' and 'Do I really need this?'

CK

Moneymaid

DCF D79 Sorry I maybe wasnt clear. My debt is 20 k my annual salary is 32 k so my debt is less than my annual salary. MM

CKhalvashi

Moneymaid wrote: »

DCF D79 Sorry I maybe wasnt clear. My debt is 20 k my annual salary is 32 k so my debt is less than my annual salary. MM

But to borrow £20k again, will leave total available/debt at £40k, which will cause a problem.

CK

Cycrow

plus most lenders wont lend upto your annual salary, most wont even lend to half of it, which you are already at.

so its unlikly to get another loan, realistically, u'll need to be on about 80k, to get the 40k of credit

DCFC79

Moneymaid wrote: »

DCF D79 Sorry I maybe wasnt clear. My debt is 20 k my annual salary is 32 k so my debt is less than my annual salary. MM

What i was trying say was the debt is more than half your salary, i just missed the half out.

fozmcfc

Being honest, this is a recipe for disaster and I'm not sure I'm wasting my time in even replying, you have got to get serious. You're in debt and you're talking about getting a car in the future.

Firstly, the loan is highly unlikely. A lender has no guarantee you would pay the current debts with a new loan and can't force you too, so you could just take the £20k loan and blow it on clothes and holidays etc. That's why they will look at it as £40k debt.

6 or 7 years at £500 a month, that is a long time in life and if your circumstances should change, I'm betting you would not be able to afford it.

If you have £500 a month now to throw at the debt, then that is what you should do.

I would post over in the debt free wanabee board.

You would be best posting each individual debt, the interest rate and the repayments such as the minimum for cards and your actual set loan repayments.

Members can then give better advice, including what to pay off first.

If there is a possibility of moving some to a 0% balance transfer card then do it. You could be lucky and get one, as I did when I had about 50% debt to my salary.

I had several debts amounting to over £15k about 5 years ago. I looked at what I was paying and worked towards paying them off in an order. I was lucky and got one 0% balance transfer card and moved some of my card debt to it.

I then made minimum payments to it, while using the money I was saving to overpay another card. Then once cleared, that money went on overpaying one loan. Then once that loan finished, I move the repayment to another loan, while keeping minimum payment to the 0% card.

After one debt goes, then move that repayment to another debt and so on. After each debt goes, things become a bit easier.

It takes, determination and change of lifestyle. Which means living with bare minimum spare cash for the first year at least. If you're not serious about it, then you will fail.

With £500 a month to throw at the debt, you could well be clear within 4 to 5 years, after the first year or so, you should be able to start having a bit more cash, to either throw at other debts and/or give yourself the odd treat.

At the beginning I lived like a monk as they say. After just few months, the difference was immediately clear. I realised how much money I was wasting on rubbish. My debt had already started to go down and I realised I could even afford to throw more money at the debt.

Once I started I got addicted to just saving and clearing the debt. I didn't waiver as soon as I was paid, I worked out how much spare cash I had and at least 80% of it went to debt clearance.

But as I say, you must be serious and determined.