Debt Consolidation Loan with Halifax

tocca_2

Hi all,

Just after a little bit of advice, me and my wife have recently sat down and worked out all of our debts. We have added up a total of £34000 which includes the car on finance. Since the car on finance is 0% APR we have decided not to include this.

That leaves us with £28000 in CC, Loans and Overdrafts. I have £5000 cash after the sale of my car to pay off the O/Ds and little bit of CC which leaves us with Credit Cards and loans etc to pay off. We have a meeting with Halifax on Saturday and the guy there has suggest a Loan to get everything into one manageable payment and go from there. I have worked out all our outgoings and its well over £900 a month which doesn't even start to reduce our O/Ds or CC amount owed. I worked out we would need a loan of around £24000 and we could easily afford to do this over 3 years. which is around £750 a month. How likely are Halifax to go for this? I have a clear plan with all the figures worked out for them. Anyone else been though similar?

mum2one

the one thing I would check is the apr as a debt consolidation loan it may be higher, 3 yrs is a long time to put £750 by for debts??

would you be better putting up a statement of affairs (linky on the top), and see of savings can be made...

Or maybe worth contacting stepchange and doing a debt remedy plan with them.

tocca_2

Yea ill have to double check the APR. I cant find that statement of affairs link.

£750 a month is split between two of us. We have a monthly take home income of £3600 so after all the usual bills we will still have enough for a little bit of savings etc

Tixy

The statement of affairs link is here http://www.stoozing.com/calculator/soa.php

Debt consolidation loans are not generally favoured on these boards, however if you decide its a route to look at then don't rush in to any decision in branch, I would get a quote from them (assuming they are willing to offer you a loan that size) and go away and think about it so you can work through the numbers in detail.

Also make sure you know the APRs on all your existing debts.
Before you go I'd also consider using the statement of affair calculator and snowball calculator to work out how long it will take to clear your existing debts if you don't consolidate but do use the snowball method
Snowball calculator here - http://www.stoozing.com/calculator/snowball-calculator.php

tocca_2

I'll do the calculators tomorrow

The big loan is our first option we have discussed. Realistically what are our chances of having it accepted?

Tixy

Depends on how much of debt is already with that bank, your salaries, your credit histories etc.

It can be difficult getting large loans accepted for debt consolidation is the tendency for them to also consider the worse case scenario that you don't repay all your existing debts, or reuse the cleared cards and so they try to factor that risk in to their affordability calculations.

tocca_2

Around £16000 of that is with Halifax itself..

plus £4k in overdrafts..

R_P_W

tocca wrote: »

I'll do the calculators tomorrow

The big loan is our first option we have discussed. Realistically what are our chances of having it accepted?

If you were halifax, what would you do?

tocca_2

Going off the plan we have made and the fact im going to pay the overdrafts today, go with our plan. As it benefits everyone in the long run surely?

[Deleted User]

If it is £750pm over 3 years, that gives an APR of about 7.9%.

Charges will be around £3,035, with a total repayment of around £27,035.

I suggest running you debts through the Snowball Calculator (link below), to see how much interest you will pay, if you continue paying as you are now.

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

Also, as advised by others, post an SOA (link below), and see if you can make some economies, sufficient to clear the debts, for less than the charges on the loan.

http://www.stoozing.com/calculator/soa.php

Also, since a lot of the debt is with Halifax, it's worth asking yourself "What's in it for Halifax?".

Think about it, if you were a bank, would you help your customers, to pay you less interest?

[Deleted User]

tocca wrote: »

As it benefits everyone in the long run surely?

In my experience, banks only voluntarily do things, which benefit them.