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Time to end the debt spiral
Comments
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I don't have another credit left on my cards to use any 0% deals, and I don't want to apply for any further cards due to the negative effect this will have on my credit, particularly as I'm still weighing up the loan option.0
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Clearing the car loan may give you back the £143 per month but the interest rates are so high on your credit cards they are going to keep rising and the payments with them unless you can reduce the interest rates by doing balance transfers or by lump sum repayments which your budget will not allow.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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That makes sense and I hadn't really considered this.0
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Trouble with using the family loan for the car is that this just about makes the situation manageable but gives you no free cash to reduce the CC debt. In 2 years time when you need to start paying off the family loan you will be in pretthy much the same situation as now. This is a case when a consolidation loan from the Credit Union could work - cash flow is the killer now and that would help. It sounds like you are sensible enough not to spend up on the CCs again.
The DMP could be the solution though despite the effect on your credit history.loose does not rhyme with choose but lose does and is the word you meant to write.0 -
Thanks for the advice so far everybody. I've been on a long run of night shifts so not in the position to sort anything so far. Still considering the loan option as it still appears to me the best way to get my cash flow in order. Even snowballing would take longer and require bigger monthly payments as far as I can tell.0
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The £3500 loan from a relative will be landing in my account later today. I think I'm fairly settled that I'll be using it to pay off the highest interest card debts, as opposed to the car finance. Still unsure what to do re the possibility of a consolidation loan however. It appears to me to be the best way to increase my cash flow and manage the debt over the next few years. Would I be better applying for this now, or next month when the £3500 loan has reduced my debts a little bit, and has been reflected on my credit file?0
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