High levels of 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 the car on _PCP.

Do you think I should wait a few months and get the debt down more and try again for a loan with a bank or something? Really want to get this under control but with the several payments I am finding it difficult.

Welshie28

Hi Matt,

From experience, you will probably never find anyone to lend to you with such high levels of debt, they will see you as a lending risk due to the amount of debt you have and the different finances you have. The only way you could consolidate would probably be if you have a family member who could maybe help? Everyone thinks they can consolidate and it'll be easier, believe me, consolidation doesn't work. My debt was so out of control, I wasn't sleeping, I was constantly applying for loans and being rejected, it was quite depressing. In the end, I ended up biting the bullet and contacting stepchange for a debt management plan! It's been amazing, been in it for 6 months now, I'm controlling my spending and finding it sooo much easier to live without the stress and a more manageable payment. Life is good again. Yes it's ruined my credit file but it wasn't the best anyway and it gets better after a good few years. Worrying about your credit file with the amount of debt you have is not worth it when you can get help or at least advice from stepchange or other companies that deal with this.

DCFC79

Consolidation wont be happening for you. You have 22k in debt so a loan would double your debt, not going to happen.

Consolidation rarely works anyway so Id stop looking for a loan and concentrate on paying your debts off.

You can get it under control by not spendingmas much, cut back on groceries, the luxury items eg a bottle of wine or cancel the netflix/ Amazon Prime subscription.

Thrugelmir

Matt201626 wrote: »

Really want to get this under control but with the several payments I am finding it difficult.

If you wish to avoid staining your credit history. Then you need to live on what you earn. Going to be tough I know. However it's the only way that you'll learn, i.e. from experience. You need to get your partner onside as well to support you.

Dobbibill

Consolidation rarely works so being declined has probably been the best thing that could have happened. (you probably don't agree at this moment in time) It's also not paying it off, merely moving it. You would still have the same level of debt.

Complete a SOA, budget every penny and pay off as much as possible off the debt.

If you are looking for tips to on reducing your outgoings, post the SOA on the DFW board. There are some very helpful, knowledgeable forum users who will be able to tailor the advice to your situation.

Upsidedown_Bear

Duplicate thread here:
https://forums.moneysavingexpert.com/discussion/5572138

Matt201626

Hi,

I am probably being stupid but in a few months when more debt has been paid I still want to consolidate. Paying minimum on a card and two loan payments is not great when I could be paying 600/700 over 3 years for it all. I understand that long term it will cost more and obviously isn't great, but it gives me control back which I currently don't have. I don't want to have a debt management plan as I want a mortgage in the future.

However thanks for all the advice, 9'definitelt going to do a few budgeting plans and sort everything out! Hopefully!!!

Matt

Thrugelmir

Matt201626 wrote: »

I am probably being stupid but in a few months when more debt has been paid I still want to consolidate.

Lenders aren't going to falling over backwards to offer a large single consolidation loan. As it is rarely the solution. Lenders have the statistics to back this up. Hence why it's not a mainstream market for them.

Dobbibill

Matt201626 wrote: »

Hi,

I am probably being stupid but in a few months when more debt has been paid I still want to consolidate. Paying minimum on a card and two loan payments is not great when I could be paying 600/700 over 3 years for it all. I understand that long term it will cost more and obviously isn't great, but it gives me control back which I currently don't have. I don't want to have a debt management plan as I want a mortgage in the future.

However thanks for all the advice, 9'definitelt going to do a few budgeting plans and sort everything out! Hopefully!!!

Matt

What leads you to believe you will get a rate that will equal £600-£700 per month. Debt consolidation is rarely offered at a cheaper APR.

If you 'want' to consolidate you will learn the hardest lesson. Read the forum, there are plenty of consolidation posts that despite the best intentions, life's curve balls just wouldn't allow the situation to play out as expected.

Remember your username and password and pop back in a year and let us know how it goes.

ViolaLass

Why would consolidating give you more control than you have now?

poppasmurf_bewdley

Matt201626 wrote: »

Hi,

I am probably being stupid but in a few months when more debt has been paid I still want to consolidate. Paying minimum on a card and two loan payments is not great when I could be paying 600/700 over 3 years for it all. I understand that long term it will cost more and obviously isn't great, but it gives me control back which I currently don't have. I don't want to have a debt management plan as I want a mortgage in the future.

However thanks for all the advice, 9'definitelt going to do a few budgeting plans and sort everything out! Hopefully!!!

Matt

Please explain how a consolidation loan will give you back control which you don't currently have?

To consolidate what you owe with one loan without removing permanently the methods by which you have already got yourself into dire straits is just asking for trouble and leaving you opening to being in a worse situation in three or four years time.

People on this forum who are telling you that consolidation seldom works are generally talking from experience. And you can add me to those who are telling you that.