£70,000 consolidation loan?

geedoggg

Hi all
New to MSE so be gentle. Basically me and my partner find ourselves in debt of £70,000 consisting of loans, credit cards and overdrafts. Ideally we would like a large consolidation loan as our overdrafts and credit cards aren't coming down any but i'm guessing we would have no chance? Any help or advice would be greatly appreciated.
Thanks.

nearlyrich

Hi Geedoggg welcome to MSE I would be really surprised if any institution was willing to lend you £70k to "clear" existing debt, not sure if you have seen it but we have the debt free wannabe board which will probably be the best place for your post in the long run so I am going to move it over there..Good luck with clearing the debt.

BeingDebtFreeStartsHere

Hi,

We are in a very similar situation to you - we've just set up a Debt Management Plan with StepChange to manage our debts. Is this something that you are considering?

SC have been extremely helpful and we are paying a fixed amount every month. They go through your income and expenditure and work out how much you can realistically afford to pay back towards your debts.

It may be worth giving them a call? Or National DebtLine give the same advice too.

Maybe post on the DMP mutial support thread if you decide to consider this - a fab bunch of supportive, friendly people all in the same position who give great advice.

Good luck and keep us informed of your decision.

BDFSH x

geedoggg

I have looked on the stepchange website and others like this but a few things are holding me back about these options. We both aren't keen on anything which will affect our credit score as in 5 years time we would like to sell our home to move into a bigger house, get married and start a family etc as by that time we will both we entering our thirties.

CKhalvashi

geedoggg wrote: »

I have looked on the stepchange website and others like this but a few things are holding me back about these options. We both aren't keen on anything which will affect our credit score as in 5 years time we would like to sell our home to move into a bigger house, get married and start a family etc as by that time we will both we entering our thirties.

If you were defaulted, you'd be looking at around another two years; not huge in the grand scheme of things.

Focus on getting the debt down significantly, as no bank will lend to you with £70k of debt.

It may be worth putting an SOA on this thread, and seeing what is going in/out before you go any further. Someone can then look into this further, to see how you can reduce your outgoings.

bargainbetty

With the best will in the world, you have £70k of debt. Unless you bite the bullet and do something about it now, you probably won't be able to afford to do any of those things anyway.

Unless you have a really high income, you are likely to struggle to continue paying these debts as interest will continue to mount. With a DMP, you stand a chance of interest being frozen on some of the amounts, allowing you to make proper inroads into clearing the debt.

Start with a statement of affairs. Set out your full income and expenditure and see exactly how the two match up. Is your debt increasing each month? Can you afford to live and pay back in your current position?

You may be able to switch some smaller amounts onto 0% cards, but frankly, no one is going to offer £70k unsecured for consolidation.

Go onto the Debt free boards and look at the budgets there for tips and hints, but honestly, I think you need to reconsider a DMP, because it may be the only way you can do those things, just in about seven years instead of five.

HappyMJ

geedoggg wrote: »

Hi all
New to MSE so be gentle. Basically me and my partner find ourselves in debt of £70,000 consisting of loans, credit cards and overdrafts. Ideally we would like a large consolidation loan as our overdrafts and credit cards aren't coming down any but i'm guessing we would have no chance? Any help or advice would be greatly appreciated.
Thanks.

geedoggg wrote: »

I have looked on the stepchange website and others like this but a few things are holding me back about these options. We both aren't keen on anything which will affect our credit score as in 5 years time we would like to sell our home to move into a bigger house, get married and start a family etc as by that time we will both we entering our thirties.

You do have a chance but it really is not recommended. You need to sort out how this debt accrued and will it accrue again. If you borrowed to build an extension onto your property then yes you could remortgage releasing additional equity which could go towards paying off the loan that was taken out to pay for it. If you borrowed money to buy a car then securing the debt is a very bad idea. You could be paying for the car long after it's been scrapped. If the credit card debt simply just accrued over time if you paid them off using another loan what will prevent you from just accruing debt on them again. You could find you owe £70,000 more on your mortgage and owe another £70,000 in 5 years time.

I would suggest you posting a statement of affairs (SOA) to see if there anything in your budget that could be reduced so you can meet your minimum credit commitments.

Pixie5740

It's highly unlikely that you'll find any lender willing to lend you £70,000 unsecured. Even if you could, do you realistically think you'd have the loan paid off in 5 years time when you're looking to upsize your home and start a family? If you think you could repay a £70,000 in 5 years you should look at snowballing your dent instead of consolidating.

sourcrates

It does depend on your income, but in order to clear 70k of debt within a reasonable time frame, you will be looking at an IVA in my opinion.
With respect, you are living in cloud cuckoo land if you think anyone will lend you this money via a consolidation loan, and to be honest, I seriously doubt you have had your light bulb moment as yet, as you still seem to think you can borrow your way out of trouble here, and are more worried about your credit score than actually tackling the debt :eek:.
You really need to complete a statement of affairs so that more specific advice can be given.

downhillfast

Without some idea of what you earn etc nobody here can give you any realistic advice on how is best to pay off your debt.

Post up an SOA and you'll receive some excellent guidance - everyone on here had been in your position to some degree so there is a LOT to gain :beer:

PinkPoppies

As far as I am aware the maximum banks will consider lending for an unsecured personal loan is £25k, so £70k would have to be secured against your home- as others have said though, the chances of you being offered either are slim to none.

I can see why consolidation loans are attractive to people, on the face of it they appear to be a simple and 'affordable' way of repaying debt... BUT they can work out much more expensive in terms of interest compared with snowballing AND they don't tackle the route of the problem... especially if you end up running up your newly paid off lines of credit again, as many many people do.

We looked into a consolidation loan, but couldn't get one, and I thank my lucky stars. The online snowball spreadsheet has been a godsend to us, such a brilliant tool, strongly recommend you enter all of your debts into it and have a play about with the figures- http://www.whatsthecost.com/snowball.aspx