Debt Consolidation Advice

Fletch906

Hi

I was hoping some of you could help me with some advice. I am looking to become debt free and want some advice on the best ways to achieve this.

Some background. I currently have the following debts. Bank Loan: £3500, Credit card: £1100 and overdraft up to £500 which is unfortunately used occasionally to the full. I have looked at the budget planner and have taken on board some tips to lower spending in other aspects, such as shopping in Lidl and minimum spending on non necessities. I also used vouchers and coupons where possible. Current spending is not a problem and is under control. Debts arose because of university, moving out and previous unfortunate events.

I am organised and always make the minimum payments on these debts but now want ways to clear them quicker. Things can get difficult with money as I am currently helping to support my girlfriend through university but always prioritise repayments over everything else.

I have done some reading into balance transfer cards and money transfer cards but I would like some advice on these to make sure these are the correct options. Also any other options/ advice would be greatly appreciated.

Thank You in advance!

Sanctioned_Parts_List

Without a better picture of your finances (e.g. SOA) I don't think anyone could say whether they are the right option for you or not.

Provided you are in a position not to add to the debt (i.e. your finances are stable, all routine expenditures including annual subscriptions accounted for etc.) then you maybe in a safe position to use a money transfer card to transfer your loan, residual overdraft and credit card onto a 0% interest rate, and pay that off faster than you otherwise would, remembering to switch cards before the introductory offer runs out.

However, as you are still occasionally maxing out your overdraft, in the same position I would be looking to clear the overdraft and build a cushion of, say, £1000 before trying to accelerate your other debts. Otherwise when you do get hit with an extraordinary expense, you have to cover it with new debt, which is disheartening if nothing else.

Later on once the debts are i) smaller and ii) 0% deals are easier to come by, you can treat your interest-free card as the buffer, but until then cash is the better option.

Pablosammy

It's very rare that a consolidation loan makes financial sense. That monthly payment may look lower, but you'll ultimately spend more over a longer period of time.

As you're looking to pay it off more quickly, it's even less likely to make sense. You're better off looking at a snowball calculator like the one here...

http://www.stoozing.com/calculator/snowball-calculator.php