Best way to pay off £20,000 debt

Can anyone advise me how is the best way to pay off my debt. I’ve avoided checking how much I owe for ages and so it’s built up to a ridiculous amount.
I have 4 credit cards on 0% interest, 1 with interest, a store card, catalogue debt and a £3,000 overdraft. I am sick of messing about swapping credit cards to get 0% interest and every time I need to buy something I’m getting further in debt.
Would I be better getting a loan and paying it all off and avoiding credit cards altogether? I’m determined to get rid of it one way or another. I know there’ll be interest on a loan but I think I’d feel more in control.

Replies

  • DobbibillDobbibill Forumite, Ambassador
    4K Posts
    Eighth Anniversary 1,000 Posts Mortgage-free Glee! Name Dropper
    Ambassador
    Welcome to the forum.

    A loan will only work if you get rid of the other forms of credit. What experience shows us here is a consolidation loan more often than not leads to higher debt because the original credit is kept open for 'emergencies'.
    The advantage of having your debt spread across different sources means you are able to focus on the ones costing you the most in interest first while maintaining min payments on the 0% offers.

    The DFW board is a good place to start with a SOA. See how much you can throw at your debt. Look at the snowballing method.

    Also remember to address the reason you have the debt, without doing that it could repeat itself in the future.

    All the best.
    I’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy 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 [email protected]. All views are my own and not the official line of MoneySavingExpert.

    If you can't be the best -
    Just be better than you were yesterday.
  • enthusiasticsaverenthusiasticsaver Forumite, Ambassador
    13.3K Posts
    Ninth Anniversary 10,000 Posts Name Dropper I've been Money Tipped!
    Ambassador
    No definitely getting a loan would not be the way to get rid of the debt.

    First do you know how you got to £20k in debt in the first place? Have you identified the overspending areas and taken steps to live within your income? If not the overwhelming majority of people on here consolidate as you are considering and then build up the credit cards again so before you know it you have a loan and credit cards and are in a debt spiral. Loads of threads on here showing it almost always happens.

    Stop using the catalogues, store cards, overdraft and credit cards and start to deal only in cash or using your bank debit card. You can start a DFW diary on the forum and post up an soa and make a plan to start reducing the debt rather than living on credit. Start with the most expensive.

    http://www.stoozing.com/calculator/soa.php
    Early retired in December 2017. Debt counsellor for a High Street bank in a previous life.

    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 [email protected] All views are my own and not the official line of MoneySavingExpert.


    Save £12k in 2022 challenge #36 £6800/£12,000 July 2022
  • Thanks everyone, that’s great advice feeling sick at the thought of how much debt I’ve got into and just need to focus on knuckling down to pay it off, without incurring more debt along the way.
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