Debt consolidation loan but bad credit rating?

derbychris

Hi,

Not sure where to turn with this really but would really appreciate some advice.

I have recently moved and couldn't find a new job for 8 months. Consequently I was running out of money and defaulted on 2 credit card payments. My combined balance is £2300 but because of charges I am finding it hard to meet the minimum payments - also made worse as my bank charges are usually £70 for going overdrawn and I am earning less - albeit still an average wage.

Ideally I would just like to borrow £3000 to clear these and to cover car repair bills but I know this won't happen and don't want to go down the guarantor option. I just find myself stuck in a hole I can't get out of.

I wouldn't mind paying a really high interest rate and just getting back to normal - I can afford £150/month but not when coupled with all the extra charges. I don't want to ask family for help as have had problems before.

Any help would be great, many thanks, Chris

rockm87

Hi Chris and welcome!

I dont think paying debt with debt will gain you ANYTHING....avoid avoid!

Is there anything you can sell just to get you a little ahead?

You can post a statement of affairs so we can advice you the best way to pay and what you can cut out of your current budget to help you out.

If you are really struggling, call stepchange or payplan who offer free advice and payment plans so you can pay off your debt.

dont take on any more debt.

derbychris

Thanks - I know you're right and people probably say it all the time - it's just hard to 'catch up' - you think next month will be better but then a water bill turns up for example.

I have agreed to pay Capital One £40/month - maybe the next step is to do the same with Vanquis instead of just covering charges

sourcrates

This is often asked on here, and I always give the same advice, debt consolidation loans should be avoided in most cases, as they rarely provide the solution your looking for.


The temptation to re-use the paid off credit line, is nearly always too great, and 6 months, a year, down the line, you end up with twice the debt, and are even deeper in the hole !!


If your unable to comfortably meet your credit commitments, tell your creditors, they cant help you, if they are unaware of your situation, likewise, tell your bank, ask for an interest free period while you sort yourself out, also ask for a refund of charges.


You must be proactive in these situations, they will help you as much as they can, if there proposals are still unaffordable, then stop paying, or just make token payments, get some advice from Stepchange or National Debtline, there are plenty of options open to you.

MEM62

Water bills do not just turn up. They are one if your regular bills and therefore should be expected. The advice you have received is good advice - you cannot borrow your way out of debt.

Stick up an SOA and the good people on here will be able to give you some really constructive advice on budgeting and dealing with the debt. And to keep things in perspective there are people out there struggling with far more debt that you have so keep your chin up :-)

derbychris

Thanks for the advice - I almost feel embarrassed talking to them but know it's the right first step.

I had £36k worth of debt 8 years ago that has been settled through an IVA so don't want a repeat!

National_Debtline

Hi

I agree with the others that a consolidation loan isn’t a good idea, especially if you’ve defaulted on your credit cards as the interest is likely to be very high. You’d be paying interest on top of interest you’ve already paid so it would be very expensive overall.

A free debt management plan with Stepchange might be a good option for you as they can help you get your payments to a manageable amount and hopefully get the interest frozen so you can focus on clearing the debt.

As the others have suggested it’s a good idea to call a free advice charity like us or Stepchange to get an overview of your options.


James
@natdebtline