want to consolidate but nobody wants to help!

bobcatflopcat

Hi

I'm married with 2 young children in nursery, which alone costs £1600 pm, plus a mortgage of £1500pm. Thats before bills and living! I work full-time and so does my husband, so on paper we have a decent income between us. Our problem is ever increasing credit card debts, not from borrowing more but from 0% ending and now only repaying minimum amount every month and every month using our overdraft..

We want to consolidate our debt into one more manageable repayment but although our credit scores are fair/good/excellent, depending on who you look at, we have large credit facilities/exposure so nobody will consider lending to us, even though we want to cancel all the cards and get rid of the bulk of the facilities available to us. We don't want it but are finding that only a few months back having been bombarded with offers from various banks/lenders with 0% offers, now those have ended and we are paying a lot of interest every month and so not actually paying off anything, nobody wants to help us. It seems the only people out there are extortionate secured lenders who charge massive interest rates and often on a variable rate too.

Any advice on consolidating with a high street lender and how to convince them you will actually get rid of all the credit cards/facilities IF they help you to consolidate?!

Phew, that was a long one..

27col

The time to pay down the debts was when they were at 0%. Paying only the minimum repayments has got to be a mugs game. If you weren't addressing the loans/debts when they were at 0% how can you seriously expect to pay them when they are attracting a considerable amount of interest.
It sounds as if a bit of serious belt tightening would not go amiss.

jubilee14

Hi Bobcat as previous poster mentioned the clearing of debts with interest is pretty hard going. alot of us on the DMP were in similar situations one of my debts is from a loan i paid for a car and then used a reasonable rest to pay down on a large cc. 2 years later life had changed again and i had been using the cc to supplement while still only paying the minimum payments on all debts.

Someone should be able to post the stoozing calculator which will help you work out what your outgoings are. if there can be any changes to lifestyle that can make up for the debts but with high priority costs it might be a tall order.

there is also a snowball calulator where you can pick the highest interest debt off and pay minimum on rest. but if you have loans etc this might be difficult to do.

Best look at your income/outgoings to assess whether you can do this on your own as moving into DMP will wreckany future credit if you want it. Good luck

midlander81

Hi Bobcat


Well done for posting as it's not easy to ask for help but you will get lots of support here .

27col wrote: »

The time to pay down the debts was when they were at 0%. Paying only the minimum repayments has got to be a mugs game. If you weren't addressing the loans/debts when they were at 0% how can you seriously expect to pay them when they are attracting a considerable amount of interest.
It sounds as if a bit of serious belt tightening would not go amiss.

27col - your comments were a little harsh. The OP has come here to ask for help and advice, not to be made to feel worse. I honestly think that on a forum like this you have to either be supportive or say nothing. We all know that we need to tighten our belts. That is why we are here!!!!


Bobcat - can you post a SOA so that we have a better idea of your financial situation. I am also in a lot of debt (40K) so I know how daunting this process it!!


You can expect lots of support on here. 27col's comments are not the norm for this board.

foxgloves

Hi bobcatflopcat,
Not being able to consolidate may well turn out to be a blessing in disguise. We consolidated 3 times & it didn't solve a thing. Yes, it very temporarily paid off our credit cards & overdrafts, but the debt simply grew again, as we didn't change our spending behaviour. This is the trap of consolidation loans. With a smaller monthly repayment & the psychological boost of only having one debt, the pressure is relieved & spending continues as normal. If you haven't managed to budget hard & reign in your spending to get the cards paid off when they were at 0%, are you likely to do this once you get a consolidation loan, to ensure that you never overspend your income again?
I ask this not in judgement, but because we were in this same situation. Each time we consolidated, we borrowed a little bit more 'just in case'. When the famous Lightbulb Moment struck regarding our irresponsible spending/debt levels, my partner initially wanted to opt for a 4th (& final) consolidation, but I would not comply. Instead we paid off each debt one by one, snowballing the repayments at the next debt each time we got rid of one. We achieved this by cutting out unnecessary expenditure such as extra TV channels, various memberships/subscriptions, then changing providers to get better monthly deals. I then set a budget each month for groceries, etc, which we stuck to. This freed up more money for chucking at debts. We also had a thorough declutter of the house & sold lots of bits & pieces on eBay & this money also paid down our debt. We did other things too, like not having a holiday for a while, always taking lunches to work, cutting out takeaways, eating out less, etc. Once we got going, we enjoyed the challenge. Every £ saved is another £ off that debt total.
So that is the approach which worked for us. Consolidation loans were an absolutely epic fail, & I know many folk on these forums have similar stories. My best wishes with finding a sustainable solution which works for you.
F
P.S We owed around 30k in total, so it is doable, though I do appreciate that your mortgage is a lot larger than ours.

DCFC79

Consolidation isn't the answer, call 1 of the debt charities and get a DMP set up and a free 1 at that. Forget what your credit scores are as lenders don't see them, all they see is the credit history so defaults, what credit card accounts you have open etc.

Post up an soa if you like and let others see where you can cut back.

asajj

A little tool for you to put your outgoings

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

DD265

Another person who consolidated and it was a bad move.

Post up an SOA and the good people here will be able to help

dancingfairy

Unfortunately if you've been turned down once it gets progressively harder anyway. That's because each time you apply the lender will put a mark on your credit record (and I believe it records the fact you were turned down - even if it doesn't it doesn't take a genius to figure out you'd been turned down or you wouldn't be asking again) and this goes against you for the next application.
If you've tried a few (including your own bank) then it's unlikely you will be able to consolidate.
You have 2 broad options - 1) cut back on everything you can and slowly but surely pay the debt off or 2) realise you can't make the minimums and go for something like a dmp or an IVA or possibly even bankruptcy. It is worth having a chat with one of the debt charities to see what they would recommend for you.
df

midlander81

Have a look at the thread that I posted a few days ago. It basically outlines how consolidation got me deeper into debt. I am not saying that it doesn't work for everyone but for me the consolidation loans were definitely a mistake...


https://forums.moneysavingexpert.com/discussion/5140624=


hope you are soon feeling better about things.

GenericUsername

Hi Bobcat,

A slightly different perspective from me. I consolidated my debt onto my mortgage as I had a good bit of equity in the house. I wasn't able to do this alone as no one on the high street would touch me. I had a large amount of unsecured debt and my own bank and a few other lenders all said no.

In the end I went to a mortgage broker and he managed to get me a new mortgage with Halifax with paid off the old mortgage and gave me the extra borrowing to clear my debts.

Now I have one monthly payment with is half of what was going out before. My unsecured debts were around £800 a month and my mortgage payment is just less than £400.

I understand what people are saying about debt consolidation being a bad idea as you are not really paying the debt off but I just have a few points for you to think about:

1. Don't consolidate debt unless you have had the infamous lightbulb moment and are completely fed up of all forms of credit. The main danger is getting to a better financial position and then running up the debts again. For me, the credit cards, overdrafts and loans are gone and will not be coming back. But in order for my consolidation to be successful I have been on a massive emotional and spiritual journey which has completely changed how I live in relation to money and debt. Just requiring a 'quick fix' without having your head in the right place will more than likely not work.

2. I thought that the one place I would get help to organise a remortgage would be with my bank. I had been with them for ten years and it never even dawned on me until I had been turned down twice that they would never give me a mortgage. Why would they change around £20,000 of debt at 10% APR into a mortgage at 2.27%. The only good customers for a bank are the ones who are in debt. That's the people who make them money.

3. One of the things that the mortgage broker was able to do was to write an agreement for me to sign with the Halifax that the extra borrowing would pay off specific things and they could see proof of this one month after the funds had been released if they so wished. I think the fact that I was definite on what I wanted to achieve helped the mortgage broker to put something in place quickly. Halifax were able to see that when I wasn't forking out the £800 a month for the cards, loan etc, I would more than be able to afford to pay them each month.

4. My consolidation was the final step on a long journey during which I had cut out as much spending as possible. It was the cards and loan payments which were killing me. Everything else had been cut to the minimum but I was still skint at the end of each month because of so much money going to pay back debt.

There's a lot more to it than I have put here and I obviously don't know your exact circumstance, but I wouldn't put you off consolidation. I would just say that it needs to run parallel with a determination to live permanently in the black.

Good luck with everything.