How can I consolidate debt

skint_betty

Hi there, just wanting some advice really. A few years ago I got myself into about £18000 of debt via loans and credit cards (STUPID credit cards and STUPID loans and very STUPID me). I've been paying these off over the last couple of years and have been making progress. Ive never defaulted on my payments but it has left me with very little disposable income in order to cover the payments each month which has been very difficult and stressful.

I recently found out me and my other half are expecting out first child, a bit of a suprise but we are both very excited :rotfl:. I went into my bank and applied for a debt consolodation loan (my outstanding debt is now around the £9000 mark), in order to reduce my monthly payments so there was more funds for baby, but it was declined due to my credit score.

Is there another way I can look at debt consolodation without it getting too serious, like I said the payments are affordable so I don't want to go down the IVA routes or anything like that, but I'd love to free up some cash so I can provide for my child.

Thanks

Cycrow

the best way would be to try and make cuts to your outgoings and use any avaialble money to start clearing the debts you have.

You could spend the next 9 months or so living as cheaply as possible then when the baby comes your debts will have reduced and so will your monthly payments freeing up abit more money.

depending on your credit file, a 0% balance transfer option might be possible to at least reduce the interest on part of the balance.

you could post up an SOA to see where you could make cuts

MrsSmith2013

Does your OH have a better credit rating than you? Would he be willing to get a lower rate loan or a zero percent card in his name to consolidate?

Just a thought, not everyone will agree its a good idea, taking debt in someone elses name will always have risks associated, but its just a thought....

Good luck with the pregnancy and baby!

Mrs S x

onamissionEU

A word of warning - debt consolodation RARELY works. Something like over 90% of people going down this road end up in more debt than they had in the firstplace. WHY? Because, like yourself, people free up a little disposable income and start spending again (for whatever reason). People usually feel richer and more in control of their finances and end up "sticking this or that on a card".

The only way consolodation works is if you move everything into one place at a lower rate and maintain you current payments thus reducing debt quicker. On top of that ANY freed up means of credit (ie paid off credit cards/OD) must be closed off so you do not have the possibility of racking up more debt.

The reason the bank refused you credit is because YOU CAN NOT AFFORD IT. If they gave you a loan for 9k you would still have the "available credit" from existing cards etc to start spending more/racking up new debt.

The ONLY way is to possible get 0% bal transfers (closing unused cards) to reduce your interest levels and pay off the debt as quickly as you can. Try the snowball calculator to see how quickly and in which order you should pay your cards.

http://www.whatsthecost.com/snowball.aspx

Sorry for the lecture but I and many, many others on these boards have been there (several times) and know that in the vast majority of cases consolodation does not work - it is a clever term the banks use to sell you more debt.

Congratulations on becoming pregnant - such a wonderful thing. As another poster suggested, post an SOA so others can point out savings to be made and spend the next 9 months paying off as much as you can.

beanielou

If you cant get a loan with your bank then I hate to say that you are unlikely to get a loan anywhere else with a half decent APR.