High levels of debt- need to consolidate

MEM62

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

You need to be clear that consolidation loans very rarely work. Also, unless you understand why you are where you are financially, your situation will not improve. You are still suggesting that a paying additional interest to clear the debt is OK with you. This is an indication that reality has still not fully hit you. You cannot borrow your way out of debt. You are going to have to do this the hard way.

With respect to a potential mortgage, I suspect that you will have to resign yourself to the fact that you are a long way from this. Once you have got your spending under control, cleared you debts the task of saving a deposit begins. In your situation there is no quick fix for this.

bargainbetty

Get the feeling he isn't coming back?

Just in case, add one more to the 'consolidated twice, got the tshirt' line/ It rarely works and in this case the funds are unlikely to be available.

Until you learn to live within your means, it will never work.

AliceBanned

Consolidation can work in some cases but the discipline needs to be there first. Patience is essential here.


Try using YNAB - it has helped me hugely to get my spending and debt repayments under control - without a DMP, which I also didn't want.


It sounds like (like me) you are just about managing so you want to struggle on and find light at the end of the tunnel. You haven't defaulted (I presume) so you don't want to wreck your credit file - you want to improve it but this takes time.


However you need to do some serious budgeting. Can you get out of the car contract and just buy a runabout car for a while? With that level of debt seriously you don't need a high-value car. I know you may like it and want it but you don't need it. From personal experience, getting rid of some of the ties (whether the car or whatever else you can) will bring some relief and simplify things. It will also help you to face reality. Forget about everyone else - friends' flash cars and exotic holidays, do what is right for your finances in the longer term.


I have many cards too and it sounds like you are starting to sink and it is more the affect on your wellbeing that is causing you to want to consolidate than anything. Credit cards are stressful and I think if you are serious about changing your lifestyle and repaying, switching them for a loan could be the right answer - but only if you massively cut back and stick to it. Otherwise as most replies on here are saying - don't consolidate.

abby1234519

I'd never consolidate with a commercial loan, my dad's loaned me money to pay off cards and obviously I know have to have the self-control not to spend on them or get any more. I've closed most of the cards already, just left the BarclayCard one open (CL of £2700) just in case I need it to balance transfer from the one remaining card. However this particular card is at my mums so I'd have to drive for 90 minutes to get it! Hopefully I'd have changed my mind by then....

If I had taken a commercial loan out I really don't think it would have helped, the only reason I think I can do this with my family loan is I have a LOT to prove - there's greater consequences than just money, its the relationship with my family.

TrustyOven

AliceBanned wrote: »

Consolidation can work in some cases but the discipline needs to be there first. Patience is essential here.

Exactly!
If you already have the discipline to make consolidation work, you probably would never have gotten into so much debt that consolidation is needed.

Thrugelmir

AliceBanned wrote: »

Consolidation can work in some cases but the discipline needs to be there first. Patience is essential here.

Learning from experience cannot be bought. Singularly it's the best way of ingraining the required discipline on a permanent basis. Not just a temporary one.

poppasmurf_bewdley

bargainbetty wrote: »

Get the feeling he isn't coming back?

Just in case, add one more to the 'consolidated twice, got the tshirt' line/ It rarely works and in this case the funds are unlikely to be available.

Until you learn to live within your means, it will never work.

I too had that feeling when you wrote it.

Looks to be correct. Probably off school for the chrissy hols now and has other things to do.

Superscrooge

Nicetohaveyou wrote: »

Here are few reasons why you should search for the aid of a Payday Loan Debt Consolidation Program:

• To lower your monthly payment
• To reduce interest rate
• To terminate late and over limit fees
• To stop harassing calls from lenders
• To avoid legal traps
• To refinance a car/student loan or payday loan to a lower rate
• To negotiate terms for you
• For financial freedom.

Now you decide what is best for you.

...and if anyone is daft enough to take out a payday loan for debt consolidation, Here are some links you will find useful.

http://moneyaware.co.uk/2013/07/how-do-i-get-out-of-payday-loans/

https://www.moneyadviceservice.org.uk/en/articles/payday-loans-what-you-need-to-know#avoiding-the-payday-loans-trap

http://www.daveramsey.com/blog/get-out-payday-loan-trap

http://www.creditcards.com/credit-card-news/six-reasons-avoid-payday-loans-1264.php

Thrugelmir

Superscrooge wrote: »

...and if anyone is daft enough to take out a payday loan for debt consolidation, Here are some links you will find useful.

http://moneyaware.co.uk/2013/07/how-do-i-get-out-of-payday-loans/

https://www.moneyadviceservice.org.uk/en/articles/payday-loans-what-you-need-to-know#avoiding-the-payday-loans-trap

http://www.daveramsey.com/blog/get-out-payday-loan-trap

http://www.creditcards.com/credit-card-news/six-reasons-avoid-payday-loans-1264.php

Better advice than

I think it doesn't matter when you took the student loan. It is still active. Check articles from U.S. Department of Education Blog "Student Loan Forgiveness (and Other Ways the Government Can Help You Repay Your Loans)"

Think that this poster is on the wrong forum.

motorguy

Matt201626 wrote: »

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.

I think you need to go for a DMP through one of the free agencies such as Payplan. You need to accept you're never going to dig your way out of this on your own.

That amount of debt in a car in your situation is a severe liability, but i cant think what Renault would be worth what you owe on it, so you're probably going to have to live with that.