Debt consolidation help

DCFC79

Mickey_G23 wrote: »

My recent history is very clean. No missed payments in 18 months. Do you have any experience of zopa or similar?

No I dont its just what Ive read on the site, zopa is a p2p lender which means its not a financial institutions money but you borrow money from everyday folk who provide funds via zopa.

vics199

Hi Mickey, I don't know if this will be of any help but I have been in a similar situation as you for a few years now. I don't owe as much (probably around £16-17,000 now plus student loan if I sat down and added it all up again) but at one point is was about £25-28,000. I earn around £30,000 a year depending on overtime.

I had wanted to consolidate into one loan rather than paying a loan, 3 credit cards plus paying my parents back and student loan. However I was refused a loan based on credit rating/affordability as basically I just owe too much and am therefore a risk to banks despite the fact that I pay all of my payments and haven't paid late for over 2 years (I am aware that this stays on file but its significance does go down). So I have long given up on getting a loan and have just settled for finding the cheapest ways of paying off my debt as there is no way I will ever go down the DMP route.

So the route I have gone down lately is trying to switch all my credit card balances onto interest free which I have managed to do through Barclaycard. They do a credit card for people with lower credit scores and offer interest free for 18 months. This allows me to pay off what I can afford (£200 a month due to loan, parents, student loan, mortgage etc as well) and that all goes to paying money off rather than interest. When that period runs out I will hopefully by then be able to get another interest free card and carry on the same. Without trying for one of these cards I would still be drowning in paying off the interest.

Hope this helps in some way.

vics199

I know you won't be able to get it all onto interest free but you could hopefully move some across. I was actually quite shocked that Barclaycard gave me a £9,000 credit limit considering banks won't even touch me for a small loan! So definitely worth a try!

Mickey_G23

vics199 wrote: »

Hi Mickey, I don't know if this will be of any help but I have been in a similar situation as you for a few years now. I don't owe as much (probably around £16-17,000 now plus student loan if I sat down and added it all up again) but at one point is was about £25-28,000. I earn around £30,000 a year depending on overtime.

I had wanted to consolidate into one loan rather than paying a loan, 3 credit cards plus paying my parents back and student loan. However I was refused a loan based on credit rating/affordability as basically I just owe too much and am therefore a risk to banks despite the fact that I pay all of my payments and haven't paid late for over 2 years (I am aware that this stays on file but its significance does go down). So I have long given up on getting a loan and have just settled for finding the cheapest ways of paying off my debt as there is no way I will ever go down the DMP route.

So the route I have gone down lately is trying to switch all my credit card balances onto interest free which I have managed to do through Barclaycard. They do a credit card for people with lower credit scores and offer interest free for 18 months. This allows me to pay off what I can afford (£200 a month due to loan, parents, student loan, mortgage etc as well) and that all goes to paying money off rather than interest. When that period runs out I will hopefully by then be able to get another interest free card and carry on the same. Without trying for one of these cards I would still be drowning in paying off the interest.

Hope this helps in some way.

Many Thanks, The best reply yet and what I am after. You have provided an actual answer to my question and not just for the sake of upping your "replies" tally.

Once I have looked around I may be in touch with you if this is ok? The biggest problem at the moment is a HSBC credit card. I already have a Barclays with 6.9% for life which every time i have any room Ill dump more.

Other than Barclays do you know of any others who are sympathetic to bad credit while giving good APR? The golden question.

19lottie82

Mickey_G23 wrote: »

19lottie82 Old 23-10-2012, 10:55 AM
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Default How to handle finances when cohabiting with OH with a TERRIBLE credit rating?
Hello! I’m after some advice, and I was hoping someone on the famous DFW board might be able to help?

Basically the situation is this…… I’ve been with my partner for almost 3 years and we are hoping to move in together in the New Year...............

Lottie, I am new to MSE but know how to use a search engine. I wanted to check to see if you had experience in this before taking your life changing advice of going down DMP route.

So what did you do? I would really appreciate your help.

We keep our finances totally separate. Have no joint bills or accounts.

19lottie82

Mickey_G23 wrote: »

My recent history is very clean. No missed payments in 18 months.

Not recent I'm afraid, this will flag up a red light for potential lenders. They can see as far back as 6 years.

Mickey_G23 wrote: »

Yes I agree, still £40k.I would pay off and cancel all cards.

I'm afraid it doesn't really matter if you agree, potential lenders will see this as increasing your borrowing to £60k, no matter what you use it for.

OK, so when you get the money, if you use it to pay off your debts THEN they will be back down to £40k, but during the period in between, your outstanding debt would be £60k, not £40k.

This just doesn't add up in terms of affordability for potential lenders.

I'm not meaning to be harsh OP, but there is no chance someone will lend you another £20k on top of debts of £40k with a £35k salary and missed payments as recently as 18 months ago.

The idea of shifting your debt to 0% cards, is good in principal, but again, I think you will be hard pushed to find a card provider who will lend you as much as you desire, based on the factors above.

I'm sorry if this is not what you want to hear but I'm just being honest.

Mickey_G23

19lottie82 wrote: »

Not recent I'm afraid, this will flag up a red light for potential lenders. They can see as far back as 6 years.



I'm afraid it doesn't really matter if you agree, potential lenders will see this as increasing your borrowing to £60k, no matter what you use it for.

OK, so when you get the money, if you use it to pay off your debts THEN they will be back down to £40k, but during the period in between, your outstanding debt would be £60k, not £40k.

This just doesn't add up in terms of affordability for potential lenders.

I'm not meaning to be harsh OP, but there is no chance someone will lend you another £20k on top of debts of £40k with a £35k salary and missed payments as recently as 18 months ago.

The idea of shifting your debt to 0% cards, is good in principal, but again, I think you will be hard pushed to find a card provider who will lend you as much as you desire, based on the factors above.

I'm sorry if this is not what you want to hear but I'm just being honest.

Thanks for the help.

19lottie82

OP, all cards on the table, without being judgemental, I really think you need to consider a DMP.

You have 40k worth of unsecure debt, that you are unsuccessfully trying to juggle, by taking out MORE debt.

Although you earn an above average salary, you openly admit that you are struggling and paying out about 50% of your wages in debt repayments. That's not right and it must be causing your stress levels to be shooting through the roof.

How long do you think you can carry on like this? Have you worked out how long it will take to pay off your debts, if you continue paying just the minimum payments each month?
Plug your figures in to this site to find out.

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

You say you don't want to ruing your credit rating by applying for loans or going on a DMP, but to be honest it's pretty much on the way there already (missed payments only 18 months ago / high levels of debt). Your "score" is totally irrelevant, potential lenders don't even see it, instead they rely on the factors I've mentioned.

You said yourself that debt charities have advised a DMP, and I also really think it's for the best.

Again, please don't think I'm judging you or being a know it all, there just doesn't seem to be any other realistic routes, apart from shelling out 50% of your wages every month and not even scratching the surface. I can't even begin to think how depressing that must be.

There are plenty of posters on here who have had their "Lightbulb Moment" (LBM) who will be more than willing to help and offer advice whenever you need it.

Good luck OP, I hope things improve for you soon!

SammenForLivet2

I know this may not be conventional, but do you have a mortgage?

Have you considered re-mortgaging your house, to see if you can repay at least some of this card debt?

I'm not saying that is the way to go - but I think this could be an avenue you may want to consider, if all else fails?

ilovelondontown

Mickey_G23 wrote: »

Many Thanks, The best reply yet and what I am after. You have provided an actual answer to my question and not just for the sake of upping your "replies" tally.
.

I'm surprised 19lottie82 replied after a comment like this, nobody is obligated to reply to any message posted, if someone has taken the time to reply to you message and provide you with a helpful insight, regardless of whether or not it's what you wanted to hear, it's graceful to at least be thankful for the response. "upping your reply tally" doesn't happen around here for kicks, these boards are some of the most respectful and helpful I've ever seen on the net, so be kind, we're only trying to help.

To that end, I was going to mention the same point about consolidation- given the amount you owe against your income, you're almost certainly not going to find any high street bank willing to provide you with a loan of this size because they don't assume you'll cover off your current debt with it, even if you tell them so, they will simply see £40K of debt + £17K of new debt - £35k income = HIGH RISK.

You say your debt is being well managed, by your own admissions your running out of money half way through the month, which means you're in bad financial shape.

Post a SOA and the good people here can help you find ways to cut back so you have a little more across the month, then if you cut every corner and find you can't make one month meet the next then you need to seriously consider that a DMP might be the best thing for you to get yourself back to a better place financially, without throwing yourself in to possible further, crippling debt for another 7 years +