Loan for debt consolidation - what am I doing wrong?

andyfromotley

Reidles wrote: »

One last thing: I have a mortgage. Kind of. It's a joint mortgage with my ex/mother of my kids. We both can't get out of it, so she keeps up repayments (as she lives there) while I pay her money for child maintainence. Naturally, becuase I don't live there I don't declare it/the fact I have a mortgage on any applications I was wondering if I could use this to any advantage to help me with my otehr debts? The main reason I haven't considered bankruptcy is becuase of my link to the house...

Really? At what point did you think this was a sound idea. Do you really think that not mentioning it meant that companies wouldnt know about it? Nope theres no advantage to it. it makes your situation appear even worse than it already was. The companies arent interested in the fact that you dont service the mortgage, they are very interested in the fact that you are liable for the mortgage.

I'm not having a go because belive me i have been there and done that with the whole debt thing. But i'm not really sure that you are grasping the point on this. The problem isnt the high ratio, lending policies or interest rates. Your basic problem is that you need to spend less. Probably a lot less, and pay off your debts. This is your solution.

From everything that you have said i think that a loan will not solve your problem and will just worsen it. Your dad would be daft take on the risk of your debt for you.

Good luck with whatever you decide, as i say the DFW forum is always a good place to seek advice.

phillw

Reidles wrote: »

Do I have high debt/income levels? Sure, that's exacly what I'm trying to address. I can't reduce my debt/income level...becuase I have a high debt/income level.

The only way to reduce your debt/income level is to increase your income or reduce your expenditure.

The high interest is essentially an insurance premium against default. You want a low premium even though you are high risk.

It would be bad enough to get an advance on your inheritance from your parents, but if they don't have the cash to spare then co-opting someone to your debt is never a good idea.

-taff

Reidles wrote: »

The thing that irks me (and no doubt many, many people on here) is the rather backwards way the credit system works. Do I have high debt/income levels? Sure, that's exacly what I'm trying to address. I can't reduce my debt/income level...becuase I have a high debt/income level.

Backwards thinking. You got yourself into debt because you borrowed money that you had to evenually pay back, so you agreed and took responsibilityfor borrowing this moey, despite knowing how much the APRs were to start with.

Reidles wrote: »

One last thing: I have a mortgage. Kind of. It's a joint mortgage with my ex/mother of my kids. We both can't get out of it, so she keeps up repayments (as she lives there) while I pay her money for child maintainence. Naturally, becuase I don't live there I don't declare it/the fact I have a mortgage on any applications I was wondering if I could use this to any advantage to help me with my otehr debts? The main reason I haven't considered bankruptcy is becuase of my link to the house...

Have you considered what would happen if your ex decided not to pay the mortgage? You are equally liable for it, so if you do borrow more money to pay off the money you already owe, you'll be even worse off and looking to borrow more money to pay off the money you owe.

Snowballing, an SOA and the Debt free wannabe board are good places to start.
Or Stepchange/CAP etc......

Vikipollard

In answer to your question 'Loan for debt consolidation - what am I doing wrong?', the answer is applying for a loan in the first place!

People regularly say 'I can easily afford the repayments' but in reality they can't because, even IF you can get further debt at a lower interest rate, unless you have addressed they underlying problem - spending outside your means - all you will do is run it up again.

You haven't said (probably because you haven't been asked) what your salary is, given you are looking to be in effect in £30k of debt.

Don't involve your Dad in this. If you insist on going that route, at least let him take the loan out in his own name and get a decent rate. It will be his debt anyway.

But in all honesty, I don't think you will listen. You are hell bent on getting this loan no matter what. Been there, done that (twice) with a train crash for an ending. Nothing improves until you change your attitude to spending.

barbiedoll

Pros: You have a decent, secure job.
You live with your parents (I'm guessing?)
You earn enough to service your debts.

Cons: You have child maintenance to pay
You're potentially liable for mortgage payments
You're living beyond your means.

You will simply have to stop trying to borrow your way out of trouble and start living within your means. Stop using credit cards, cancel any expensive contracts that you can get out of (phone, Sky, etc) and start paying more than minimum payments on your credit cards.

How long have you had the HP for the car? Could you give it back and live without a car, or get a cheaper banger? That would get rid of one large payment straight away.

"Snowballing" means throwing every bit of spare cash at your most expensive debts (usually high-interest credit cards) so that you pay them off first. This frees up cash to pay towards the next most expensive debt (perhaps paying off a loan early) and so on.

The only way forward is painful, hard going and often embarassing. You'll have to wear last year's clothes. You'll have to spend less on Christmas presents for the kids (who really don't care about the value of stuff, your time is more important than your money)
You may have to take the bus or drive a horrid car. You may have to use a !!!! phone for a while. But the only way out of this mess is the hard way. And blagging a loan from your dad is not the way to do it. All you'll be doing is prolonging the agony, you may as well do it now and get it over and done with.

There are plenty of us who have been there and done it, myself included. We would have paid off our mortgage by now, if we'd got a handle on our debts years ago. All we have to show for it, is a load of old receipts for electronic goods, toys and home furnishings, most of which have long been thrown out..all of which we could have done without.

Don't dig a deeper hole for yourself, get your head round the fact that you're in trouble and you need to start sorting it out. There's nothing like the feeling of buying something that you have actually paid for in the here and now, with no credit. You'll never have that if you don't put a stop to the endless borrowing.

MEM62

A consolidation loan will bring you potential borrowing to £30K. In order to be able to borrow that you need an income in the region of £60K to meet most lenders affordability criterion.

The additional problem is that consolidation loans often do not work as spending remains an issue - particularly as the pressure has been taken off with lower repayments on your current debt.

I think you'll need to do this the old-fashioned way. Work on your budget and identify where any savings can be made. List all your debts and start throwing any spare cash at the debt with the highest interest. When that is cleared concentrate on the one with the next highest interest rate and so on.

DCFC79

Reidles wrote: »

Love the username, but a little unsure on the analogy...

I'm asking for an escalator to get myself out of the hole. Potential creditors may think I'm using it to ferry hoookers, booze and poker tables down the hole, but I'm really not lookign for it to be a bigger hole.

From a lenders pov they will see the worst case scenario which is you spend it on poker tables, spend it on the latest must have electricals, holidays abroad, a new car. When it comes to making the monthly payments you cant as you didn't use the money to pay off the old debts.

chambta

As stated above the mortgage is highly unlikely to be something that can be ignored.

With at least one High Street bank the affordability checks link in the credit reference agency data and the figures get dragged through whether you mention them or not. The fact that you aren't currently paying it personally makes zero difference as you're liable for it.

peaceandfreedom

barbiedoll wrote: »

The only way forward is painful, hard going and often embarassing. You'll have to wear last year's clothes. You'll have to spend less on Christmas presents for the kids (who really don't care about the value of stuff, your time is more important than your money)
You may have to take the bus or drive a horrid car. You may have to use a !!!! phone for a while. But the only way out of this mess is the hard way. And blagging a loan from your dad is not the way to do it. All you'll be doing is prolonging the agony, you may as well do it now and get it over and done with.

There are plenty of us who have been there and done it, myself included. We would have paid off our mortgage by now, if we'd got a handle on our debts years ago. All we have to show for it, is a load of old receipts for electronic goods, toys and home furnishings, most of which have long been thrown out..all of which we could have done without.

Don't dig a deeper hole for yourself, get your head round the fact that you're in trouble and you need to start sorting it out. There's nothing like the feeling of buying something that you have actually paid for in the here and now, with no credit. You'll never have that if you don't put a stop to the endless borrowing.

Yeah, what Barbiedoll said - read, listen and do what she says, it's the only way. You are talking to people who have been down this road before you.

Also, go and read Mr Money Moustache to help change your way of thinking:
http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

I find that spending time on that site keeps me on the straight and narrow (if rather regretful of my profligate past ).

Forget the loan and leave your Dad out of this.