Consolidating ALL debts to Loan.

kimi1977

I am currently thinking of consolidating ALL debts to 1 single loan monthly payment, would this be possible not being a home owner.

Although currently low income (looking for more work) I have a secure income.

My debts are £6000 business loan 13%
Personal Credit Card £4800 HSBC (£10K limit), £4200 Barclay (£10k limit) , MBNA £4054(£5k limit) all around 27%
Overdraft around £480

Looking to get better interest and get the monthly payment down to around £250 rather than £500 at current.

What options do I have , would it be worth speaking to the bank again, I did ask them about a year ago but they seem to enjoy the higher interest they are getting so dont want to help. Is it worth speaking to other lenders?

bengal-stripe

kimi1977 wrote: »

What options do I have , would it be worth speaking to the bank again, I did ask them about a year ago but they seem to enjoy the higher interest they are getting so dont want to help. Is it worth speaking to other lenders?

The chances that anyone will lend you another 20k on top of your current 20k debit are virtually nil.

Yes, you want to consolidate and pay the old debt with the new money, but nobody will know for certain whether you actually will do that, or, once the Credit Cards are cleared, you won't run them up again and in a year/a few years you have twice the debt you have today.

So any bank will view it as an additional loan and taking into account your currently "low" income. You better improve your income now and make inroads into the debt, so that you have a successful track record of reducing your debts.

kimi1977

Ok - so the options are just paying down what I have with the higher interest, wont banks look at current card limits though, and reduce them to compensate the borrowing? A friend of mine did the same and managed to consolidate with the bank.

andyfromotley

Two thoughts,

Have you tried to BT to 0% cards. Your APR's are very high. This could result in a huge saving and is cheaper than a loan.

Why do you have so much unsecured debt? Is it still growing? If so you need to solve this problem, debt is the symptom not the cause of financial mismanagement. If you dont solve it then it wont really matter what you do you will soon end up in the same position.

Whatever you do if you open up new credit to shift this debt to you MUST CLOSE the existing credit facility or you could end up in a whole heap of trouble.

I hope this helps Andy.

kimi1977

Thanks Andy , Yes I am quite happy to close the credit facility - I dont use 2 of the cards, I used them couple of years ago, and have been paying them off over time with extra payments and monthly fee.

Nasqueron

kimi1977 wrote: »

Ok - so the options are just paying down what I have with the higher interest, wont banks look at current card limits though, and reduce them to compensate the borrowing? A friend of mine did the same and managed to consolidate with the bank.

A personal bank, where they know you AND can loan you the money and immediately pay off the debts you owe them (e.g. if you have loan and CC with bank and get the consolidation loan) can work as the bank can pay off the debts in full (and perhaps get you to close the CC) - if the debts are all over there is no guarantee you won't just use the loan money for your own stuff and then end up with twice as much debt

kimi1977

Yes I totally get that, bit like giving a kid 2 chocolate biscuits, if he gives up the 1 in his hand whats not to stop him from eating the 2, people will always be tempted to use them again.

I will speak to my personal bank, I'm quite happy to give up my cards