Should we consolidate our loans?

Foxy-Stoat_3

If you get another loan you will have to state the purpose, which will be consolidating other debts. The interest rate you will be offered will more than likely be higher than what your paying. So either stay as you are or use your savings to clear the debts and rebuild them again.

ReadingTim

Read this, if you haven't already.

With regard to your comment about "life happens", many things in life are entirely predictable. Christmas and birthdays for example, happen around about the same time every year. In the unlikely event something genuinely unexpected happens, get a loan or use a credit card to deal with at that time.

27col

Paying interest on a loan when one doesn't have to is one of the most ridiculous financial decisions that any person can make. If you have the will power to save in the first place. Then why can you not just carry on saving to replace the money. If you set up some type of regular transfer of funds to a savings account, then you would probably not even notice the money going.
As others have said, the watchword is Willpower.
A large majority of life's unexpected occurrences are not unexpected. They can be be predicted to occur with monotonous regularity.

pickle9910

Thank you all for your replies, I totally understand what you're saying and don't want to just dis-regard your opinions but we feel using our savings is not for us. If our employment circumstances change we would never be able to replace that money.

We do have willpower - we have no mortgage, save £300 per month into our ISA's, £100 each for Birthdays, Christmas and Holidays and save for the children. The unexpected life occurrences are extra nights out we haven't planned (or more expensive ones), school trips etc.

We can afford the loans (which we have had for a year and so have paid a fair amount of interest already - even though we have low rates at 5.5%), so think we will continue as we are.

macman

Your approach is just completely illogical. If your income drops due to employment circumstances, then you may not be able to service the debts anyway.
Far better to pay down the loans when you can afford to do so-that's not to say you deplete your savings to zero. Just keep a reasonable contingency fund for real emergencies. Not Christmas/birthdays, something like car repairs or a new boiler.
Your loans may be relatively 'cheap' at 5.5%, but the income you are getting on your savings is a fraction of that-maybe around 1%-before tax, unless it's in an ISA.
So for each £1 you receive in savings interest, you are paying out £5.50 in loan interest.
That really is the economics of the madhouse.

27col

We're wasting our time on this one macman. Quite obviously, at no time does logic enter the mind of the OP.

AFK_Matrix

It really is scary sometimes seeing the logic some people have. Shame the OP won't listen to you and is happy flushing money down the loo. But hopefully other people in the same position have read this and have actually taken on board what people have said and paid the loan/loans off!!