Making the most of an opportunity

SashaP

Hi
I have 21k of credit card debts (7k tescos, 5k MBNA, 3k Amex 3K Natwest and 3k capital one, and pay £500 per month on minimum payments.
This is crippling the family budget and my Dad has amazingly kindly offered to GIVE me 10k to help reduce the payments on my debt.
I have applied and been approved for a Natwest 10k debt consolidation loan, but the Apr is 20% and I'm not sure it is any better than the cards.
I just really want to make the most of the amazing opportunity my Dad has offered and get the family finances back on track.
I'm unsure what to do for the best.

January2015

From personal experience consolidating doesn't help.

I would take the wonderful gift from you Dad and throw every penny at clearing the balance. Try snowballing the debts.

With half the debt removed you would be able to pay more to the remainder to clear them. In this way you would learn from the experience of having to clear debts from your income rather than borrowing to clear them.

I have made this mistake many times and the debts just kept mounting on the cards again.

sourcrates

Don't take the consolidation loan for starters, biggest mistake you can make is to borrow more money to repay existing debt, many people have been down that rocky road, and been back here 12 months later, with twice the debt they started out with, I would strongly advise you don't do it !!!

Best way for you to proceed would be to make reduced payments to your creditors, and save up the surplus cash, add the 10k from your dad, then six to ten months down the line, make full and final offers to each creditor, as money is available, settle each one, and be rid of them for good, best of all, no extra borrowing, and no mega 20% interest to pay, that's what I would do !!!

another_casualty

Why not go on a d m p ? The payments you make per month will be a lot less. Regarding your dads offer , I wouldn't take it . He may be able to help you out in an emergency further down the line . Hope it works out for you , whatever you decide .