High debt - need to consolidate

Matt201626

Hi,

Would really appreciate your advice or help!

I am 27 and I earn a decent income, unfortunately due to debts that have risen over the years through balance transfers and consolidation they have gone higher. I have 22k in debt,

Breakdown: £1000 on barclaycard, 10800 on MBNA platinum, 5000 on lending works loan at 9.9% and 5500 on a first direct 3.9 % loan. I earn 39600 a year and after tax and deductions 2451 a month.

I also have a car on Renault 4 year finance, settlement is around 17k and 240 a month. My rent is 450 including bills which is split with my partner, he pays the other 450.

Each month I go into my overdraft by about 300 and spend some more on my credit card. I have started to learn more about budgeting and I am slowly getting there. However, I need to consolidate this all into one payment over 4 years but struggling to find anyone to lend to me. My credit file is between fair and good depending on who it's checked with but clearly my affordability isn't great due to my debt being the same as my income when you include the car. I have had a few credit checks over 6 months but this hasn't fully affected my file it's more the debt that affects it.

I have been declined three times by lenders, TSB, hitachi, ratesetter (this didn't affect my file as it was a soft search). Lending works and Zopa won't quote me due to my high levels of debt.

I don't want any IVA,s or debt plans which will affect my file. How can I sort this and consolidate?

Current payments , 340 to lending works, 460 to first direct, 140 roughly minimum to MBNA, 150 to Barclay card, 240 to car.

Thank you so much!!

Kind regards

Matt

Upsidedown_Bear

Duplicate thread here:
https://forums.moneysavingexpert.com/discussion/5572142

sourcrates

Matt201626 wrote: »

Hi,
I have been declined three times by lenders, TSB, hitachi, ratesetter (this didn't affect my file as it was a soft search). Lending works and Zopa won't quote me due to my high levels of debt.

I don't want any IVA,s or debt plans which will affect my file. How can I sort this and consolidate.
Matt

Hi,

In about a couple of years time, when your debt has reached around 50k,

come back, and we'll have that talk that you don't think is nessessary today.

I'll speak to you then.

YorkshireBoy

Matt201626 wrote: »

...due to debts that have risen over the years through balance transfers and consolidation

No they haven't! They've risen because you've been living (and spending) beyond your means. In order to have a balance to transfer, or consolidate, you must have first racked up said balance by living (and spending) beyond your means.

Would you agree? You need to agree before you can move on.

Anyway, there are 3 ways out of debt:

1. Earn more
2. Spend less
3. Re-structure the debt, in order to reduce the servicing costs.

Re-structuring the debt is totally out of the question, so that just leaves earning more and/or spending less. So what are you doing on those fronts? Second job? Ebay your 'stuff'? Rent a room? Packed lunches? Beans on toast 3 times a week? Cancel Sky? Cheaper mobile contract? Or even PAYG?

mcpitman

YorkshireBoy wrote: »

No they haven't! They've risen because you've been living (and spending) beyond your means. In order to have a balance to transfer, or consolidate, you must have first racked up said balance by living (and spending) beyond your means.

Would you agree? You need to agree before you can move on.

Anyway, there are 3 ways out of debt:

1. Earn more
2. Spend less
3. Re-structure the debt, in order to reduce the servicing costs.

Re-structuring the debt is totally out of the question, so that just leaves earning more and/or spending less. So what are you doing on those fronts? Second job? Ebay your 'stuff'? Rent a room? Packed lunches? Beans on toast 3 times a week? Cancel Sky? Cheaper mobile contract? Or even PAYG?

Nothing more to add to this, apart from you mention you have consolidated before.... how did that go?

Good luck, but the message is a resounding stop spending as much and living beyond your means. :beer:

Superscrooge

Matt201626 wrote: »

Hi,

I am 27 and I earn a decent income, unfortunately due to debts that have risen over the years through balance transfers and consolidation they have gone higher. I have 22k in debt,

Matt

Matt,

Forget debt consolidation It rarely works, (as you appear to have discovered!)

There are numerous examples on these forums of people wanting advice on how to consolidate their £20K debts and then the following year they want advice about how to consolidate their £30K debts!

You need to concentrate on paying back your debts, rather than dodging them.

Work out which debt is at the highest %APR. and throw as much money as you can at that debt. Then when that is paid off, move on to the next most expensive debt etc.

I appreciate this isn't easy. But it will be far more successful than constantly trying to kick the debt into the long grass by consolidating.

austonic

Forget consolidation, just pushes debt further into the future and gives you a false sense of security.

Focus on generating more income, suffering (minimalist living pain now for a better future), and paying highest rates off first.

Getting into worse debt will do more harm than agreeing payment plans now. Once you've done a new budget, consider an agreement on the lowest interest rate debt so you can focus on repayment of the highest in the shortest term if you really cannot achieve anything better.

foxy-stoat

Keep paying the debts off at the current level, you only have 6 months of the barclaycard left, so pay more into the highest interest rate loan, in a year you would of cleared the 2 loans and you can pay more into the MBNA card.

If you can get out of the PCP and get a cheaper car then do that.

You wont get a consolidation loan so forget that.

Dird

Do you have a cocaine addiction? How are you spending £2700 per month when splitting living costs with somebody?

27cool

You say that you are starting to learn about budgeting. But you have not made any mention of actually spending less per month. You seem reluctant to accept anything that might alter your lifestyle.
You are not going to be able to borrow your way out of this. Living on the minimum possible for a while will free up cash to reduce your debts. If you don't want to do this then your situation is unlikely to improve.
You are earning the sort of money for which, many people would think they had died and gone to heaven if they earned that much.
Your financial problems are entirely due to your habitual overspending, and if you don't rectify this situation the future could be bleak for your finances.
You have received good advice. I suggest that you follow it.