Should I consolidate

DanFathers

I have about 18,000 on three credit cards at rates between 18-23 %
I currently pay back about £500 PCM in total
Should I consolidate these cards to one loan or carry on paying the cards, I tried a while ago to transfer one of the balances transferred on to a interest free card but got declined I imagin due to the large unsecured debt I have

I know I have been silly getting this debt,

Please advise thanks

CLAPTON

reducing the interest you pay is a good thing
increasing the amount you pay back is a good thing

whether getting loan is possible will depend upon your income and credit history

presumably you are now spending less than you earn?

BillJones

If you can get a lower rate, if you pass the affordability tests (for which you'll probably be needing to earn around £36,000 per year), and if you are certain that you will cut up the cards, and never use them again, then it's not necessarily a terrible idea, but it's not likely that you will find a lender willing to play ball.

You need to be aware of the very real danger, too, that while you still have the loan outstanding that you look at your empty credit card accounts, and give in to the temptation to spend on them again "just this once". Many, many people have fallen into this trap, and so find that they end up far worse off.

This is why people suggest snowballing, or paying off the debts in order of the highest interest first, instead of consolidating.

The reason that many people seem to want to consolidate is that it feels like a pain-free way of clearing debt. You need to always keep in mind that it's not clearing debt at all, it's normally adding to it.

DCFC79

Debt free wannabe board might be a good place to post OP.

his_missus

I would agree with Bill that, whilst a consolidation loan seems an ideal way, the temptation of "clear" CCs can lead you into a false sense of security. I speak from experience having got stuck in a vicious consolidation cycle before I learnt my lesson. I took out the loan, cleared by CC debts but then kept using one CC and ran it back up so extended my loan to pay it off but then ran up the CC again so extended the loan...

I would suggest that if you choose a consolidation loan, you need to close your CCs as soon as they are clear or keep one in case of an emergency but lower the limit to a very small amount. Build up an emergency savings fund if possible to avoid needing a CC at all.

[Deleted User]

A bit short on info.

What are the actual balances and APRs?

What is the APR on the loan you are considering?

Brock_and_Roll

OP, you know the answer to this question don't you!!

Back in 2009 your new partner helped you out by paying off all your credit card debts.......but 4 years later you have racked up another £18k !!

https://forums.moneysavingexpert.com/discussion/1778715

DCFC79

OP why not go through the steps posted on your other thread ?

Gaz83

Debt consolidation only works if the consolidator has the willpower not to just spend on the cleared credit cards / overdrafts again.

Judging by your history OP, I'd say it's a bad idea.

Caz3121

You would also need quite a significant salary, although you would be asking to borrow £18k to pay off £18k on cards, there is nothing to force you to do that so you would in theory have £36k of debt and need a salary that could support that (£70k+?)

dealer_wins

Brock_and_Roll wrote: »

OP, you know the answer to this question don't you!!

Back in 2009 your new partner helped you out by paying off all your credit card debts.......but 4 years later you have racked up another £18k !!

https://forums.moneysavingexpert.com/discussion/1778715

This happens in nearly every consolidation case, and its what keeps bank bosses shareholders smiling.

Back in my Lloyds days the bank's "valued customers" were the ones that paid £2000-£4000+ interest every year, re-financing and consolidating every few years (some yearly)

Amazing how so many people go through their working life and waste thousands upon thousands of pounds in interest!!

OP as DCFC79 has suggested post on the DFW board, start living within your means and stop wasting so much money in interest!!