Consolidating Debt

Street101

I’m looking for some advice as I’ve not been great with my debt over the last few years

Current debt is:
Loans-£8,300
Credit Card- £3,775
Total=£12,075

This is costing me £290 per month to pay back the loan which ends in 2022 and minimum payments on my CC

I’ve been accepted for a £13,000 loan at 7% apr which will be £315 for 4 years

Is this a worthwhile loan to take out to consolidate.

Thanks in advance

[Deleted User]

Impossible to say without knowing the rates of your current debts.

You'll probably be better off posting on the DFW boards, where they can help you cut costs and clear the debt faster.

When you're not good with managing money, more borrowing is rarely the answer.

kwame41

Not a great idea to try and borrow your way out of debt.

Need more information really.

The main loan would be paid in four years anyway. Can you get a 0% balance transfer for the credit card? You would be able to pay more of the lump owed more quickly with the same £290 your using at the moment.

foxy-stoat

What is the interest rate on the loan you already have, and how much did you borrow originally?

Street101

My CC is 0% until 2020.


Original loan amount was £11,000 at 11.5% APR

DCFC79

Street101 wrote: »

I’m looking for some advice as I’ve not been great with my debt over the last few years

Current debt is:
Loans-£8,300
Credit Card- £3,775
Total=£12,075

This is costing me £290 per month to pay back the loan which ends in 2022 and minimum payments on my CC

I’ve been accepted for a £13,000 loan at 7% apr which will be £315 for 4 years

Is this a worthwhile loan to take out to consolidate.

Thanks in advance

It really is frowned upon to consolidate.


It would only work if you have the rest of your spending under control, not much point in taking out the loan and you pay the loan and CC off to then run up more CC debt say in 6 months time.

ReadingTim

At this moment in time, no, it is not a good deal.

Your current repayments are £290 pcm. You're thinking of a loan which will cost £315 pcm. This is more, per month, rather than less, so not a clever idea.

You're better off waiting for the interest free period to end on the CC and re-applying then. In the meantime, if you can afford an additional £25 per month on debt repayment, pay more than the minimum balance on the CC.

And if you can't afford the additional £25, then this is a bad idea full stop.

enthusiasticsaver

You are not paying interest on the credit card so putting it on a loan at 7% is not a good idea.

You already have one loan which I am guessing was also consolidation and since taking that out you have put more on credit. This is the danger of consolidation in that you don't change your spending habits. Increasing your borrowing to £13000 from £12000 is a very bad idea. You need to start living within your income or before you know it you will have loans in the region of £20k rather than £8k.

Gaz83

Street101 wrote: »

I’m looking for some advice as I’ve not been great with my debt over the last few years

Current debt is:
Loans-£8,300
Credit Card- £3,775
Total=£12,075

This is costing me £290 per month to pay back the loan which ends in 2022 and minimum payments on my CC

I’ve been accepted for a £13,000 loan at 7% apr which will be £315 for 4 years

Is this a worthwhile loan to take out to consolidate.

Thanks in advance

Just to clarify: you're going to replace debt that's costing you £290 per month until 2022 with debt that will cost you £315 per month until 2022? And you're wondering if this is worthwhile, yes?

Exodi

Street101 wrote: »

Total=£12,075

Street101 wrote: »

I’ve been accepted for a £13,000 loan

I think these two short extracts speak volumes about the greater issue here.

If you have debts of £12,000, why are you borrowing £13,000?

MEM62

Street101 wrote: »

I’m looking for some advice as I’ve not been great with my debt over the last few years

Street101 wrote: »

Is this a worthwhile loan to take out to consolidate

Short answer - No.

You cannot borrow your way out of debt. It simply does not work. Also, would I be correct in guessing that the current loan was taken out to consolidate other debts? In which case you already know that it doesn't work.