Should I consolidate

duran68

shiwen55 wrote: »

See if the loan APR is less than a balance transfer card fee, I'd go for it else balance transfer them

Balance transfer fee is 1.4% ;the loan was 8% apr

phillw

YorkshireBoy wrote: »

1. You MUST pay £250 per month towards the cards (you said you could, remember), even though they're 0% interest. You never know what's around the corner! And if you can't/don't, then that's proof that a 5-year consolidation loan wasn't a good option to be considering!

I would always leave 0% cards on minimum payment and setup a regular saver account as a repayment vehicle.

enthusiasticsaver

Good news that you are able to get a balance transfer card. Doing that is always preferable to debt consolidation loans and I would expect the debt would be repaid in much less than 5 years.

Sncjw

Have actually been offered 8% or is that the representative rate?

YorkshireBoy

phillw wrote: »

I would always leave 0% cards on minimum payment and setup a regular saver account as a repayment vehicle.

Me too, but I've never been in debt*, manage my finances well, very organised, disciplined. Not everyone is.

But taking the OP's situation...

The difference between minimum and fixed is around, say, £50 per month.

They could open a current account somewhere to gain access to a 5% regular saver, fund it each month (up to £1,750), maybe switch a couple of DDS (in the case of M&S), etc. They'd then deposit the £50 each month. And at the end of the year they'd have earned interest to the value of...

(£50 x 12) x 0.05 / 12 x 6.5 = £16.25

Even if the difference was £100 per month then that will still only return £32.50 after a year. In the OP's shoes I'd be concentrating on increasing my earnings/cutting my spends rather than chasing small returns from regular savers.


* Well I have, but it was credit card stoozing debt to the tune of circa £80,000...but I always had at least £80,000 in a savings account to cover it.

duran68

Sncjw wrote: »

Have actually been offered 8% or is that the representative rate?

Yes offered 8%

phillw

YorkshireBoy wrote: »

Even if the difference was £100 per month then that will still only return £32.50 after a year. In the OP's shoes I'd be concentrating on increasing my earnings/cutting my spends rather than chasing small returns from regular savers.

I wasn't saying it would solve their financial problems. I would expect someone to already have cut out all non essential spending and reduced essential spending to a bare minimum by this point.

Increasing your earnings would normally take a lot of effort and unless you're in a position where you can just ask your boss for more money or go from part time to full time, then it's going to take a lot of effort & spending a few minutes sorting out bank switches and regular savers to get some extra money in is worth it before your life turns into work/eat/sleep.