Debt consolidation loan - advice needed

Clive_Woody

Key question: - Have you looked into how/why you ran up £10,000 of debts and worked out how you will avoid doing this again in the future?

Some good advice already given on how to handle the debt but the big challenge is not finding yourself in the position again.

Herzlos

Get the loan, clear the cards and cancel them. Pay the loan off and be more careful with money


I wish I'd done that years ago...

enthusiasticsaver

The best way to clear the debts is to budget, budget and budget. Move them gradually to 0% cards to help with the paying off of them and pay as much as you can afford to get them cleared. Debt consolidation loans only delay paying off debt and if you already have £10k of debt and apply for a £10k loan you will be assessed on having £20k of debt as there is no guarantee you will use the loan to pay off the cards. That may mean the rate is not very good.

aidrenegade

Zero % transfers are not free, Think I was charged 5% or something of balance transferred. Still cheaper than months of interest though.

I'm just revisiting mse after a while because despite getting debt free in about 2012 and staying debt free for 3 years I'm now in a position where a 3 year dribble of problems has got me back into about 9k debt. Last 2.3k was a new car for work in May on a credit card as I couldn't get a loan as I don't own my own home. Old one failed mot ant not worth expense of fixing. It is a taxable expense but not till after next April. The rest was living on a card while going through sporadic periods of lack of work (self employed).

Currently have about 4k on 0% good for another 11 months the rest is at 17.9% Lack of work is not for long enough to try signing on. Just delays in starting work with nothing to fill the gap. Another week off again this week due to a delay in being able to start.

Willing2Learn

aidrenegade wrote: »

Zero % transfers are not free, Think I was charged 5% or something of balance transferred.

That is not correct. Some promotions offer both 0% on the balance transfer and 0% on the balance transfer fee.

aidrenegade

:T Thanks, didn't know that, I'll start looking for one! Any pointers would be helpful!

Also think I was charge 3.5% not 5%. Started my search on MSE

Willing2Learn

aidrenegade wrote: »

:T Thanks, didn't know that, I'll start looking for one! Any pointers would be helpful!

There is currently seven listed in the article below. But the number changes from time to time. Tesco definitely do one too (they are not on the list for some reason)

https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/#nofees

aidrenegade

As debt is on a Tescos card tried them first but basically cc companies don't transfer debts 'in house'. Was given the option of 3.7% over 24 months as a consolidation loan though.


Time to look at the other cards available.

aidrenegade

Used mse eligibility checker to see what I might be accepted for. Went for the Lloyds option. I'm not good enough for 0% transfer fee, paid 3% got 18 months at 0%
Possible tip / something I didn't do. Lloyds would only accept up to 95% of my agreed limit for a balance transfer. Suggest you multiply the amount you want to move to 0% by at least 1.1 and use that as a guide for the credit limit to ask for.

Should still have saved about $450 annually on current debt. Now time to secure more work to pay it off.

foxy-stoat

JayneDawson wrote: »

Debt consolidation is indeed a great idea. I have recently taken one and must say everything was quick and has brought me immense satisfaction. ***** provides you mortgage brokers with the lowest interest rates even if your credit score is low.

I suspect you work for them....SPAM !