Stuck between a rock and a hard place.

wallacemarino

I got myself a bad credit rating early on, foolishly running up a lot of bad debt as a student. It took until my early thirties before I was offered any kind of credit at all, even a high interest credit card.

As I reached my mid thirties my rating was slowly improving, I was earning more and I began to have delusions of maybe, just maybe, getting on the property ladder before I hit 40. So I started taking more credit to try and build my score faster, to the point where I have now, incredibly stupidly, over-levaraged myself.

In total I owe somewhere in the region of £8000 in credit cards, store cards and overdrafts, which is about the most my credit rating could stand at its best. Give or take a couple of late payments I don't have any 'bad' debt, I am servicing all my payments every month, but that is all I'm doing, almost everything I'm paying back is going to interest and I'm making no dent at all in my outstanding debts.

What I need is a medium term (4-5yr) consolidation loan at a reasonable rate of interest in order to pay off the cards and bring the interest down to a manageable level. However, because I'm already carrying so much credit and a couple of recent late payments have knocked a few points off my credit rating again, no-one and I mean no-one will give me the loan I need, even though I want to consolidate. I've tried everywhere.

The only finance I am able to get is a gaurantor loan with interest rates so high it negates the purpose of consolidating in the first place. And even if the interest rate were better I would not be comfortable asking someone else to take responsibility for my debt.

I know this is my own fault for letting the interest creep up on me, but now I feel completely trapped and it's beginning to badly affect my mindset. There is a clear way out of the situation with a consolidation loan, but nobody will give me one and the last thing I want is a repeat of my twenties and another cycle of bad debt, defaults, debt management plans and six or eight years digging myself out of a deep red hole.

Can anybody offer any advice or suggestions. This is driving me insane. :mad:

EssexHebridean

OK - first thing you need to do is put together your SOA (Statement of Affairs) - you'll find the link in the "Sticky" post at the top of the board. You need a budget, and need to see where you can make savings in the first instance. Make the SOA as accurate as possible - it needs to show what you are actually spending - don't fill it in with the figures you think should be there as that doesn't help. It will also show you whether you should have a surplus, and if so, how much.

If you post it in here once you're done, we can take a look and see if we can work out any savings for you.

Are you still using the cards or have you cut them up?

sourcrates

Hi,

Link to SOA calculator here :

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

Do a search of the forums to see the other threads on why consolidation loans very rarely work for people.

leslieknope

if the consolidation loan is a similar interest rate, there's no point getting it. it'll just be another credit facility. you're best posting the SOA like suggested and working out your outgoings, what you have to throw at the debt, and use the snowball calculator.

if you don't have enough money to service the debt then look at contacting a debt charity.