To consolidate or not?

kcmatt79

I have unsecured debts of around £17k. This is nearly all on 0% credit cards (apart from a 2k overdraft & 3k loan).Anyway, I don't earn a massive wage (about £1200 per month) and the £453 repayments every month are getting difficult on top of mortgage etc. I find that some months I am having to resort to using my credit cards to pay for things like car tax etc which I haven't properly budgeted for. My partner and I are also considering moving soon and this might mean bigger mortgage repayments. I don't think I could cope with this. I wondered whether I should consolidate them into one loan. I know I will end up paying back a hell of a lot more than I do now (considering I don't pay interest on a lot of it). I have done a quick search and have seen a loan rate for 6.5% from Sainsburys. This would have a monthly repayment of £221 over 7 years. I just wanted to know what people thought. Is it a bad idea? Should I try to keep to what I'm doing and know that I'll be debt free in about 3 years, or make life easier for myself but extend my debt repayments to 7 years?I will be very grateful for any advice. I feel like crying - I have £30 to last me 3 weeks!Right here goes with my SOA:Incomings:Salary: £1,279 pcmTutoring: £54 pcmTotal: £1,333Debts:Barclaycard £552 - at 0%Egg loan £2770 - at 6.7%NatWest Credit card £620 at 0%Tesco Credit card 273 at 0%Sky Credit card £1010 at 0%Lloyds Credit card £5526 at 0%Overdraft £2000 (£250 at 0%) Rest at 15.9%Outgoings (per month) Debt repayments: £459Mortgage & bills: £330Car insurance: £25Pet insurance: £18Contact lenses: £25Mobile phone: £21Petrol: £80Food: £160Piano lessons: £40Total: £1,117I can't think of anything else at the moment, other than things that crop up annually such as car tax, repairs/maintenance etc.Hope this is helpful and people can give me a good idea of where to go next. I think I've done pretty well over the last year with paying off some of my debt and managing to keep them all at 0%, but I feel like I'm struggling making these payments now.Sorry it's SO LONG!

Jacks_xxx

kcmatt79 wrote: »

I have unsecured debts of around £17k. This is nearly all on 0% credit cards (apart from a 2k overdraft & 3k loan).Anyway, I don't earn a massive wage (about £1200 per month) and the £453 repayments every month are getting difficult on top of mortgage etc. I find that some months I am having to resort to using my credit cards to pay for things like car tax etc which I haven't properly budgeted for. My partner and I are also considering moving soon and this might mean bigger mortgage repayments. I don't think I could cope with this. I wondered whether I should consolidate them into one loan. I know I will end up paying back a hell of a lot more than I do now (considering I don't pay interest on a lot of it). I have done a quick search and have seen a loan rate for 6.5% from Sainsburys. This would have a monthly repayment of £221 over 7 years. I just wanted to know what people thought. Is it a bad idea? Should I try to keep to what I'm doing and know that I'll be debt free in about 3 years, or make life easier for myself but extend my debt repayments to 7 years?I will be very grateful for any advice. I feel like crying - I have £30 to last me 3 weeks!Right here goes with my SOA:

Incomings:Salary: £1,279 pcmTutoring: £54 pcmTotal: £1,333

Debts:Barclaycard £552 - at 0%

Egg loan £2770 - at 6.7%

NatWest Credit card £620 at 0%

Tesco Credit card 273 at 0%

Sky Credit card £1010 at 0%

Lloyds Credit card £5526 at 0%

Overdraft £2000 (£250 at 0%)

Rest at 15.9%

Outgoings (per month)
Debt repayments: £459
Mortgage & bills: £330
Car insurance: £25
Pet insurance: £18
Contact lenses: £25
Mobile phone: £21
Petrol: £80
Food: £160
Piano lessons: £40
Total: £1,117
I can't think of anything else at the moment, other than things that crop up annually such as car tax, repairs/maintenance etc.Hope this is helpful and people can give me a good idea of where to go next. I think I've done pretty well over the last year with paying off some of my debt and managing to keep them all at 0%, but I feel like I'm struggling making these payments now.Sorry it's SO LONG!

Consolidation?? That's crazy talk Missus!:eek:

Now, it can sometimes get you out of a hole and it is sometimes a viable option - but there are other options too!

And from my own perspective my debts didn't start going down until I stopped consolidating!

Can you transfer any more debt onto 0% cards?

Can you cut back anywhere for a while until the debt reduces and the monthly minimum payments do too? (Cut back on the food bill, suspend piano lessons for a year... etc)

Can you bring any more money in?

And have you punched it all into the snowball tool yet - it's quite an eye opener!

http://www.whatsthecost.com/snowball.aspx

That's just for starters honey - the really clued up cookies will be along in a bit!

Love Jacks xxx

kcmatt79

Thanks, I guess I could cut out piano. I've only just started and it would be a shame. It's really the only thing I spend money on for myself (other than essentials).I know consolidation might seem crazy, but the £459 is the MINIMUM repayments for my credit cards/loan/overdraft.I was considering maybe getting a Northern Rock loan where they don't charge for overpayments. That way I could concentrate on spending a bit extra every month on my overdraft, then look at the others. I feel like I'm in a black hole at the moment.

kcmatt79

Sorry, just realised it had pasted as lines of text. This might be easier to read as a list.Incomings:Salary: £1,279 pcmTutoring: £54 pcmTotal: £1,333Debts:Barclaycard £552 - at 0%Egg loan £2770 - at 6.7%NatWest Credit card £620 at 0%Tesco Credit card 273 at 0%Sky Credit card £1010 at 0%Lloyds Credit card £5526 at 0%Overdraft £2000 (£250 at 0%) Rest at 15.9%Outgoings (per month) Debt repayments: £459Mortgage & bills: £330Car insurance: £25Pet insurance: £18Contact lenses: £25Mobile phone: £21Petrol: £80Food: £160Piano lessons: £40Total: £1,117

kcmatt79

Sorry, it didn't work!! I guess it doesn't like cut/paste.

lxpeanut

A tip from someone whos been there do not consolidate. Go to one of the free debt counsaling services instead they can advise you on the best way forward.

Good luck what ever you decide to do.

Jacks_xxx

Well it's your decison of course, my sweet, but I think if you had a tough six months and cut back on the food budget hard, dropped piano for a while ...maybe wore your glasses and dropped lenses? Got a better mobile phone deal..etc you could reduce your monthly payments.

Especially if you sold everything possible on eBay and moved even more debt to 0% cards.

I do understand the lure of consolidation though. I did it loads of times.

Have a look at the Old style board for hints on how to cut back on your food bill.

http://forums.moneysavingexpert.com/forumdisplay.html?f=33


Love Jacks xxx

PS have you talked to any of these guys? (nicked from Southern Scousers stickie)

Consumer Credit Counselling Service (aka CCCS)
Wade House
Merrion Centre
Leeds
LS2 8NG
Tel: 0800 138 1111
http://www.cccs.co.uk/

Payplan
Kempton House
Dysart Road
Grantham
Lincolnshire
NG31 7LE
Tel: 0800 917 7823
http://www.payplan.com/

Citizens Advice Bureau (aka CAB)
http://www.citizensadvice.org.uk/

or had a play with this???

http://www.whatsthecost.co.uk/snowball.aspx

kcmatt79

Would they recommend IVA? I don't really want to go down this route. I know my situation isn't as bad as others', but I feel like it's getting worse, not better. I still spent on my cc last month (about £200 in the end) and I think I'm paying this enormous amount on my debts, just to get myself into more debt! Seems ridiculous to me!

Mozette

Sounds a bit like me! It was all at 0%, but the minimum payments, plus my mortgage, plus bills, I was just getting deeper into (0%) debt every month. You need to stop spending so much; you can't afford it. Sorry if that sounds a bit blunt, but it's true. No matter how much you want to, or what a bargain it is ("but it's only £x" was my mantra), if you can't afford it, don't have it. Bite the bullet for a while, cut right back, get out of debt, then think of the time when you can spend that money, which at the moment is going on your repayments, on whatever you want. Then you'll be able to afford your piano lessons, but at the moment you just can't.
It is hard, but it can be done. This time last year I had over £15,000 on credit cards/overdraft, now it is just over £7,000. This time next year I will only owe my mortgage. You're talking about being debt free in 3 years - it really isn't that long a time, honestly.
Very best of luck.

glitzy

Hi I am also a newbie piano learner (i got my piano from the freecycle site)- i go on youtube and watch the videos and go from there, im loving it. Try not to get a loan see if you can get a low rate balance transfer for life on your cards.
I had alot of advice from people on this site, so listen to them & see if it helps you.
good luck

Jacks_xxx

kcmatt79 wrote: »

Would they recommend IVA? I don't really want to go down this route. I know my situation isn't as bad as others', but I feel like it's getting worse, not better. I still spent on my cc last month (about £200 in the end) and I think I'm paying this enormous amount on my debts, just to get myself into more debt! Seems ridiculous to me!

I'm not sure what they would recommend honey - everybodys circumstances are different.

We filled in all the info at the CCCS website and they're going to send us a Debt Remedy booklet, but I don't know what they'll suggest for our situation.

Having said that, I think it's unlikely they'd point you towards IVA since you can afford your payments and your basic essentials and there are obvious things you can cut out or cut back on in order to climb out of this hole.

Just over a year ago we owed a LOT more than the £35k we owe now and we had to make some tough decisions in order to get here. (and there's a long way to go! We'll be debt free in May 2010 or earlier if I have my way but consolidation would have had us paying out until 2028.)

It's not fun - but it's not forever either. And there's a wealth of support and info on this website which has helped us in countless ways.

If I can do it sweetie...

Love Jacks xxx