Trying to pay off debts with credit union loan?

John1993_2

louisebee wrote: »

We have 3 overdrafts (mine husbands and joint account) which charge £1 per day so £90 plus the £12.50 they charge for 2 of the accounts minus the £5 "reward"

If these are at the same bank, can you perhaps enquire as to whether they can be combined? A charge per day such as you are on can work out at not such a bad deal if you use it sporadically, but as you can see it's not ideal when you use it continuously and on three separate accounts.

Are all three maxed out? If not, max out the two largest by transferring money into the account with the smallest one, and then work as hard as you can to get that account back in credit.

As others are saying, you do not reduce your debts by borrowing more.

louisebee_2

Cycrow wrote: »

yes, it is so wrong
there are no quick and easy ways to become debt free

borrowing money to get out of debt is never the solution.

its better to identify why you got into debt in the first place, so you can prevent it happening again. And learn ways to best budget so it doesn't become a problem

Yes im aware of the concept I was being sarcastic - anyway I don't need life lessons thank you very much.
I know how I got into debt taking out loans/overdrafts for unnecessary things when I should have saved in the first place.

No one is going to make things harder on themselves if they can think of an easier way.

Anyway lets not start arguing you have said your piece leave it at that

louisebee_2

John1993 wrote: »

If these are at the same bank, can you perhaps enquire as to whether they can be combined? A charge per day such as you are on can work out at not such a bad deal if you use it sporadically, but as you can see it's not ideal when you use it continuously and on three separate accounts.

Are all three maxed out? If not, max out the two largest by transferring money into the account with the smallest one, and then work as hard as you can to get that account back in credit.

As others are saying, you do not reduce your debts by borrowing more.

Yes they are all at the same bank and I asked them for help in this and they will not help one little bit. All of them are maxed out unfortunately.
I understand what you mean it sounds stupis but isnt that what a consolidation loan is?
It just seems logical but obviously im not getting it

John1993_2

louisebee wrote: »

If thats what you think then that's fine, you dont need to try and help me. Maybe some other people will and will try not to be so quick to judge and jump to conculusions

And no actually I am trying to think of the quickest and easiest way to become debt free - is that so wrong??? If it is then im confused by the whole concept

No-one's judging, they are offering advice. It's starting to look as though you are annoyed becauuse it's not the advice that you wanted.

You need to understand that this happens a lot here. People ask for advice, and then get annoyed that they aren't told "you are right, take out a big consolidation loan. Hell, take a bit extra annd treat yourself to a night out, you deserve it".

Anyway, one obvious bit of advice is for your other half to give up cigarettes and for both of you to give up alcohol. This will save you a lot of money. Yes, you'd prefer not to, but you need to understand that there is no solution available that does not involve sacrifice, so you may as well not waste time looking for one.

The one with the least sacrifice is to take out no more credit, to cut your expenses to the bone, and to look forwarrd to the day when spare money means that you can have a drink again.

louisebee_2

Is anyone able to tell me why a loan which is a lower interest rate is not a better idea if i am paying off other debts with higher interest rates and fees?
I thought ML was always telling us to transfer to 0% cards to pay off debt etc, is that not along the same lines?
The amount I will be paying back will be less than I pay per month just now and I will be debt free in 3 years?
As I have said before, if I am missing something here please forgive me.

John1993_2

louisebee wrote: »

Yes they are all at the same bank and I asked them for help in this and they will not help one little bit. All of them are maxed out unfortunately.
I understand what you mean it sounds stupis but isnt that what a consolidation loan is?
It just seems logical but obviously im not getting it

A consolidation loan does not reduce your debt, and one reason that no-one tends to suggest taking that route is that far too often peope who do take one will immedately go overdrawn again. The type of person who gets into trouble with debts is often the sort who will see a positive bank balance and decide to treat themselves "just this once". They then gave their monthly loan payments, and still have the overdraft/credit card/payday loan payments as well.

Basically it will often result in someone ending up in a far worse situation than they were befoore they took it out.

sharp82

Your not missing anything. In theory, consolidation is a great idea. In reality people pay off the credit cards, overdrafts with the loan, dont stick to a budget and end up back in the same place as they were. However, with a large loan to pay off too.

You might not do that, and its nothing personal against you. Its just what happens

louisebee_2

Ok thanks for your help

Mara_uk7

louisebee wrote: »

Is anyone able to tell me why a loan which is a lower interest rate is not a better idea if i am paying off other debts with higher interest rates and fees?
I thought ML was always telling us to transfer to 0% cards to pay off debt etc, is that not along the same lines?
The amount I will be paying back will be less than I pay per month just now and I will be debt free in 3 years?
As I have said before, if I am missing something here please forgive me.

Hi Louise ,

IF you can get a loan, and IF you can change your spending habits so you dont run up the Overdrafts & cards again, A consolidation loan is a good idea.
IF however, you are not prepared to change your spending habits, you will end up with a loan PLUS the overdrafts etc again.
Its not a huge debt compared with some and you have decent wages coming in.
Good Luck with it all

louisebee_2

that makes sense sharp82, and I will admit I have been in and out of debt a few times (although I didn't take a loan out to pay off my debt in the first place I used my own money).
I do however think I have my head screwed on right this time and I will be sensible.