Debt consolidation loan

Lungboy

AlexDillon1 wrote: »

For the ones saying I can't afford it and am bad with money I've already saved £2200 of my own money for the holiday and paid that off, I just needed a boost for spending money.

Why didn't you pay off your debt instead of buying a holiday which then requires further debt?

poppasmurf_bewdley

If you've saved up £2.2k and paid for your holiday, but need to take out a loan for spending money, then you cannot afford the holiday.

You will be paying back the balance for five years. What are you going to do when you need a holiday next year? And the year after that? And the year after that? And the year after that? And the year after that?

It would not be too bad if you'd paid £2.2k for a cruise and only needed a couple of hundred for booze and tips. What holiday needs all that spending money?

Last year, I didn't have a holiday that I had to pay for. I'd had an expensive year with having to finance my son through a six week Combat Stress residential course, plus having a wood burner installed, plus a new washing machine and cooker.

If you can't afford something, you can't in my opinion have it. But I still managed at least six weeks away staying with friends and relatives.

Clive_Woody

AlexDillon1 wrote: »

Thanks for the replies, I was more aiming to get myself out of a bad spot long term.

For the ones saying I can't afford it and am bad with money I've already saved £2200 of my own money for the holiday and paid that off, I just needed a boost for spending money.

My thought process is that I could get a small loan and then have to pay that off with the CC and overdraft all in the space of two years or get a larger loan to cover the debts instantly plus add spending money for my holiday, paying this off monthly over 5 years.

I appreciate I'm not in the greatest spot but with a score in the green on experian I wouldn't agree I'm bad with money, half of the debt is a student overdraft pretty sure many struggle to pay that off fresh out of uni (which I am) but surely thinking long term I'm doing the right thing as in completely paying them off closing both and just living with the £120 monthly payment for the next few years?

So you are going to spend the next 5 years paying off this loan. Are you not planning any other holidays until the loan is paid off?

dealer_wins

Most people applying for a loan think the can comfortably afford the repayments.

A totally honest income and expenditure sheet will usually show they cant. Just saying over my banking years experience.

AndyPix

1. Getting another loan doesn't "wipe" your debts.


2. You cant afford to go on holiday

andyfromotley

Hi Alex,

The advice you are getting kinda sucks doesnt it?

However it is all based on good advice and experience.

You cannot afford this holiday. You have come up with a horrendously expensive way of funding it.
You are in no way clearing your existing debt, you are moving it to an expensive alternative.

You are at somewhat of a crossroads, you can choose to act financially irresponsibly, borrow to go on a holiday you cant afford, with an expensive loan. I suspect that oiver the 5 years you are paying this off you will rinse and repeat many times. (i know how it works check out my signature).

Or you can do something that will set you up for the rest of your life and almost certainly result in you becoming wealthy. Dont go on holidays you cannot afford. Dont consolidate debt. Pay it off whilst its a relatively small amount and live the rest of your life debt free.

It really is as simple a choice as that and the effects are as profound as i have stated.

Good luck with your decision. (check out Dave Ramsey podcast and you will get a good view on how to tackle your finances and live a debt free life.)

AlexDillon1

I appreciate everyone's experienced advice truly as I am a novice in this department and many of you are good at money management or have learnt lessons.

I was accepted for a tesco loan of 4500 at 4 years period repaying £120 a month.

For those saying I can't afford the holiday, I saved £2200 of my own money for it, it's already paid so I couldn't just not go because I couldn't afford the spending money myself wasn't an option in my mind.

Also saying I can't afford the monthly payments, I'll admit half of the original £3000 was inexperienced play on my behalf with a CC this past year but the other half was from a student overdraft from university that was about to hit interest rates, some of us don't have wealthy parents to support us through uni so it wasn't an option back then to not have one and it got me through. I have only been working for a year (didn't work for a year after graduating and I moved cities so moved into a flat before anyone chucks that my way. At the moment I make 23000 a year, I pay roughly £650 on rent bills and things like Netflix etc, I'm incredibly good at saving money hence why I saved so much for this holiday, I don't drink, smoke, drive and I live well in terms of the quality of food I buy and eat, I have around £450 free money to spend every month after all of this, trust me I would never take such a big loan if I couldn't afford it.

Like I said I appreciate the advice but I think I made the right decision at the right time because If I didn't do this, I would've been struggling every month to live paying these debts back over the next 18 months and for me the 4 years repayments will give me a quality of life still and manageable.

And my overdraft and CC is paid off so to the person who said I would get back in trouble again, I don't think so.

AlexDillon1

Also the tesco loan was 13.8% in the end, I didn't go for the natwest 25%

jonesMUFCforever

OK now that you have £450 free per month or £330 after your loan payment put some money aside to build up a rainy day fund or even to clear the loan early to save you interest.

AlexDillon1

£330 after the loan payment is correct and that is the plan ^