Debt Consolidation

marco_1

Any advice out there i have about £6700 in debt between a loan and a credit card ,basically 5 years plus to clear the amount .I have a good job and pay more than the mininum monthly payment i have consolidated with a loan allready! but looking to do this again.? I want to have one payment for everything but also need a car so looking to include cash for this in the new loan if i get it .
Currently am paying 220 a month for both so looking to borrow to clear the card and loan but also finance a car looking to pay the same amount say over 5 years but lose the card and other loan .Omg you are thinking am i mad any advice appreciated the car cost can be small does not need to be a huge amount .My concerns are the fact i have consolidated before will this affect me also APR don,t wan,t to be paying back a fortune .Regards Mark.

[Deleted User]

As you have already learnt consolidation doesn't work, to do it again would be madness i'm afraid, I would suggest saving up for the car,and throwing as much cash as you can at paying off the cc 1st then the loan.

sourcrates

marco_1 wrote: »

Omg you are thinking am i mad any advice appreciated the car cost can be small does not need to be a huge amount .don,t wan,t to be paying back a fortune .Regards Mark.

Hi,

Welcome to the MSE boards.

So you've tried consolidating once, didn't work, and here you are again wanting to do the same thing, even though it didn't work last time ?

Yes I think your mad !!!

Search this forum, there are countless threads about consolidation, it can work for the minority, but the majority of people find it a stopgap solution before they have to concider getting proper help with their debts.

If you want to post up a statement of affairs (SOA) then maybe we can advise on other solutions to your problem.

http://www.stoozing.com/calculator/soa.php

January2015

Whilst consolidating does work for those people who are single minded and determined to use this method to clear debts, it's obvious if you (or anyone one else) has already been down the consolidation route and find yourself considering it again, then it didn't work as it was supposed to do for you.

Seriously, don't even consider consoliation any further. If you take this option I can practically guarantee that you will have a brief honeymoon period of a single monthly debt payment for the new loan, but it won't be long before you also have additional borrowing such as overdraft, interest free credit card (which doesn't stay interest free, but in any case still needs to be repaid), and perhaps even another loan. The monthly payments towards debts will increase in number and value and you will soon feel swamped by your debts again.

I can honestly say all this from personal experience. I've been there, done that and got several useless T-shirts to evidence the fact consolidation does not work. When I was finally able to add it all up, my consolidated debts and then additional borrowing came to almost £95k. I'm not saying you would be anywhere near as stupid as I was. What I am saying is don't consolidate. Your debt levels are hopefully manageable to you at the moment. Do just that - manage them and reduce them and save for what you want.

EssexHebridean

You've said it yourself haven't you!

Sourcrates has posted the link to the SOA calculator for you - your first step is to get yourself a budget sorted. If you post the SOA in here then we can cast an eye over and see where there are savings that can be made that will help you pay off that debt sooner. If your desire for a car is because you don't currently have one, then is getting one now an essential (ie you have a change in job role which means you can no longer reach your place of employment without a car of your own) or is it a "want" rather than a need? If you do currently have one but want to upgrade now is not the time. If you just want one to make life easier/improve your social life then again, now is not the time.

You need to stop and think - at the point you're at now, and as you say with decent earnings, your situation is probably relatively easily redeemable. If you get this 5 year loan now, with your history you can pretty much guarantee that you'll not even be two thirds of the way through it before your debt increases again. Think what you're currently paying towards debts - and then think what that money would enable you to do in the course of a year.

enthusiasticsaver

This is not a route you should be taking. You need to budget and if you only pay just over the minimum payment on your debts you must be spending a fortune on interest and it will never be paid off.

Take control of your finances now while they are still redeemable. Make a plan to repay the debt and start saving for the car or in 5 years time you will be back with £10k of debt and still overspending.

Ilona

Hi. I see this from another angle. First, you want a car, but you don't have any money to buy one. Then you already have £6,700 in debt. How much is the car? Another six grand maybe at a guess? So you want to increase your debt to £12,700. A bit bonkers I would say. Do you want to set yourself up for debt for the rest of your life?

Here is an opportunity to get out of it completely. Put your car on hold, make do with what you have. Then, instead of paying a bit more than the monthly payments on your two debts, cut right back on your every day spending, and throw as much as you can at them. Cut back on your social life, you don't need to become a recluse, just look for free activities you can join in with. Take pack ups to work, ditch the coffees and lunches out, get organized.

We can help you do that if you post up a Statement of Affairs. There are clever people on here who know how to save money. If you don't take control now you will be floundering in the mire for a long time. You can do it.

Ilona

BettyBones

Don't do it! You have no idea of knowing what the next 5 years will bring and whilst what you are proposing may seem affordable to you now but what would happen if you lost your job? Got made redundant? Got sick? Or some other emergency arises? Listen to the sensible people above... do whatever it takes to clear your current debt and save up for a car. To give you a personal example... my eldest son bought a shiny new car on finance to the tune of £17k. 6 months later he wrote it off, 3 years later and he's still paying for it... along with the further expense of another car of course. I'm not saying this will happen to you but what I am saying is that you really don't know what's around the corner. We all think we've got it under control until life throws us a curve ball Don't get caught out... now is the time to get sensible... give your current debt the heave ho and save for what you want/need