Best chances of getting a loan ?

Pickle49

Hi
This time last year I confessed to my OH that I had accrued £21,000 worth of debt in loans, CC's and catalogues..and a hefty overdraft. Anyway to cut a long story short, after the initial shock, hurt and anger we are over the worst and I have worked very hard and got my debt down to 17,000. I have paid off my £2,000 OD and all my catalogues which came to another £2,000. Now all I have to tackle is the 3 credit cards. I'm thinking of applying for a consolidation loan for the outstanding amount. What I would like your thoughts and opinions on is the following :
Should I close the 4 catalogue company accounts which now all have a zero balance on them or does it look better on my credit file to show that I have that credit available to me but I am not using it. I have paid to see my credit file with two of the big names and I can see that I have an excellent credit score ( for what it's worth ) and I have never defaulted or made late payments on anything. I'm just trying to give myself the best chance of getting accepted. Any advice would be appreciated. Thanks

vics1928

Hi

First of all well . secondly can I just ask how you told your husband about it all?

mum2one

the only trouble with getting a consolidation loan is the temptation to use the credit cards once you have paid them off, then your stuck with the loan and the cards.

I would be surprised if you would get a loan with the 17k outstanding on the cards, it would be better to pay min on 2 of them and throw everything at the one with the highest apr,

Also see if you have space to balance transfer? x

Pickle49

Noooo...mum2one...I have already cut the cards up. Never going there again. Don't really want a balance transfer card as my smallest debt on one of the cards is £4,500. I reckon I will only get max credit limit of £2,000 to start with on a new card, which means that I will still have the 3 original cards plus the new one. ...meaning I will have four different payments to make each month. I would like one simple payment each month.

Vics...if you look at my previous posts from this time last year, they go into detail of how I fessed up to hubby.

thecassman86

Hi

Congrats on paying of the catalogues and the OD!

As mum2one said, Consolidation loans tend to be frowned upon because the debt is then affordable so there's a temptation to put on credit cards again. That being said, i took one out myself as i felt it was the best solution for me personally and i've not touched cards since. Hopefully that continues but i'm going to make sure it does!

You'd do well to get a loan for £17000+, that's quite a large amount for a single loan. What's the breakdown of your cards? I.e. Can you put up the amounts on each, the interest of each, how much you currently pay on each and what you can afford to pay in total? You might find that snowballing them is the better option for now.

There's the snowball calculator in one of the stickies and that's very useful for seeing how long something will take to pay off.

[Deleted User]

mum2one wrote: »

it would be better to pay min on 2 of them and throw everything at the one with the highest apr,

I agree.

Throw every spare penny (including the money you were paying toward the OD and catalogues) at the highest APR debt.

I've consolidated ODs, Credit and Store cards, and regretted it, not because I reused the cards, but because I refinanced the loan, twice (to get lower monthly payments), and turned a 5 year loan, into a 10 year one.

ETA: here's the Snowball Calculator thecassman86 mentioned.

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

FinanciallyUnsavvy

I'd definitely look into a 0% BT if I was you. If you have a very good credit rating, you may be surprised at what credit limit you'll be offered. I've just got a 23 months 0% from Barclaycard with a limit of £7,900 (I only needed £3,800). If you could get one to transfer even just one of your cards, it'll save you a fortune in interest.

I understand where you're coming from about having yet another card and yet another payment to make though - it put me off applying for some time (the first time I applied for a 0% BT was last year with Halifax and I only got £750). But this time it certainly paid off, so I'd definitely recommend at least considering it!

Good luck - and massive well done on getting this far & taking all the right steps x