Consolidation?

Inapickle12

A few years ago I was made unemployed, as a result I had to rely on credit cards to pay rent shortfalls and living costs as I was too young for assistance such as HB for it to actually cover rent, apart from that I only had £50 JSA.

I now have
Student overdraft £900 (costs £1 per day with halifax)
Credit card £1,162 (halifax 18% interest)
Capital one £1,900 (19.5% interest).

Before tax I earn £13,500 a year.
Monthly outgoings
Rent £350 (including council tax and utilities)
Car £85 (£50 insurance £35 fuel)
Car serviving/repairs £30 (including cost of MOT and yearly service)
Food £100
Phone £15
Haircuts/social £15
Clothes £20
Birthdays/xmas £20.
Total £620.

Contents insurance is provided through work,

At the moment I pay £100 on each credit card and £60 on my overdraft giving a combined total of £880.

Now looking around I can get a loan to clear all of my credit card and overdraft debt with Santander for 4.5% APR over three years with a monthly repayment of £148, this would also mean I could afford to purchase this years car insurance in one go, saving me £150 a year and meaning I can save up for the next renewal date. I have looked at 0% but despite never missing any form of payment I haven't been successful, I haven't got family I can rely on to help me out. At the moment I work full time and I can't afford to live closer to work which is why I have a car, public transport would get me to work over an hour late, a taxi would be £30 one way.

Is this a good idea? My job is secure, the credit cards are cut up, but before this they hadn't been used for four months. I don't use my overdraft at all. I have the discipline to do it, my role will not be made redundant, so I have the security to pay this over three years.

If you were in this situation what do you think the best route would be?

GwylimT

When you say 0%, do you mean you tried to appy for a 0% credit card to balance transfer?

Caz3121

have you actually been offered the 4.5% or are you just seeing this as the advertised rate? note that only 51% of those accepted for a loan will get the headline rate
You currently have £4,000 in debt so with the loan for the same, it would be seen that you would have £8,000 in debt (no guarantee that you would use the loan to pay the debt)
rule of thumb tends to be debt to income ratio of 50%
....just saw in your post that you were declined a 0% card...have you then looked at the information on your credit files?...this may also indicate that if you get offered a loan, it may be at higher than the headline rate so may give no benefit

Pixie5740

I suppose it depends on whether or not you'll actually get a loan for 4.5% APR. Lots of people over on the Debt Free Wannabe board thought they too were disciplined enough for a consolidation loan and just ended up back at square 1 with twice as much debt.

Inapickle12

GwylimT, sorry I wasn't clear enough, I did mean a 0% credit card for a balance transfer where I have been unsuccessful.

Caz, yes I can get the rate, I applied online and I have received the credit agreement outlining this interest rate for this loan amount, so if I decide to take it I need to sign the forms and return to Santander. I said in my post I would use a loan to pay my credit cards/overdraft, so I would technically be £8000 in debt but only for a few working days.

I use noddle on a regular basis and I have also used experian and equifax in the last few months. Noddle gives me a figure of 4/5, I can't remember my exact scores with the other two.

Inapickle12

Pixie5740 wrote: »

I suppose it depends on whether or not you'll actually get a loan for 4.5% APR. Lots of people over on the Debt Free Wannabe board thought they too were disciplined enough for a consolidation loan and just ended up back at square 1 with twice as much debt.

Well I haven't used any of my credit cards for around seven months, then it was to try contactless, before that it had been around five months. I haven't used my overdraft in two years.

Pixie5740

Inapickle12 wrote: »

I use noddle on a regular basis and I have also used experian and equifax in the last few months. Noddle gives me a figure of 4/5, I can't remember my exact scores with the other two.

It doesn't matter what your scores are, they don't mean anything.

You seem to have your heart set on this loan and think that you have the discipline for consolidation to work for you so go ahead.

Inapickle12

Pixie5740 wrote: »

It doesn't matter what your scores are, they don't mean anything.

You seem to have your heart set on this loan and think that you have the discipline for consolidation to work for you so go ahead.

I just wonder if it is a good option, I mean, it woule be nice to know what people who are in a cuurently good financial position, or who have experience of this could give any advice on alternatives apart from carry on as I am, or the loan idea.

I did think of getting some proper financial advice, but I wouldn't know where to start.

Inapickle12

I have done an SOA, i have put the minimum payment rather than what I actually pay as that is what it asked for. I worked on on my balance as it stands my overdraft interest is around 35%.

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary Amount(£)
Total monthly income 948
Monthly expenses (incl. HP & secured loans) 665
Available for debt repayments 283
UNsecured debt repayments 67
Amount left after debt repayments 216
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 1,900
Total Secured & HP Debt -0
Total Unsecured Debt -3,962
Net Assets -2,062
Household Information

Number of adults in household 3
Number of children in household 0
Number of cars owned 1
Income, Expense, Debt & Asset Details

Income Amount(£)
Monthly income after tax 948
Partners monthly income 0
Benefits 0
Other income 0
Total monthly income 948
Expenses Amount(£)
Mortgage 0
Secured/HP loan payments 0
Rent 350
Management charge (leasehold property) 0
Council tax 0
Electricity 0
Gas 0
Oil 0
Water Rates 0
Telephone (land line) 0
Mobile phone 15
TV Licence 0
Satellite/Cable TV 0
Internet services 0
Groceries etc. 100
Clothing 20
Petrol/diesel 35
Road tax 30
Car Insurance 50
Car maintenance (including MOT) 30
Car Parking 0
Other travel 0
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 0
Pet Insurance/Vet bills 0
Buildings Insurance 0
Contents Insurance 0
Life Assurance 0
Other Insurance 0
Presents (birthday, christmas etc.) 20
Haircuts 5
Entertainment 10
Holiday 0
Emergency Fund 0
Total monthly expenses 665
Secured & HP Debt Description Debt(£) Monthly(£)

27col

Just curious. Why is your partners income £0pm.

Inapickle12

27col wrote: »

Just curious. Why is your partners income £0pm.

I don't have a partner. Should I delete all the £0 fields on my SOA, is it assumed I use these things otherwise? I've never used an online one before: