Getting myself debt free - consolidation?

taka

EssexHebridean wrote: »

Your reference to that £3 meal deal made me smile Ryan - so many people do this, but it's another which is interesting as if that's your "standard" lunch, even ignoring the days when a little something extra sneaks into the basket too, or the fact that the chances are a lot of people will also be buying a coffee, or breakfast, the annual cost would be over £700. Add on a daily coffee on work days as well and that doubles, for many. Scary when you stop looking at the "oh well it's only a couple of quid" aspect and start to take account of the bigger picture.

This may help! It is kind of scary how quickly the little things add up!

EssexHebridean

I'd forgotten about the demotivator Taka - nice link!

ryanm8655

Awesome - just checked it out. Will have a play.

I’m not too bad for buying coffees and things like that tbh. My mine vices are booze and eating out and the two go hand in hand...that’s going to be the biggest thing to try and change. Signed the contract on my new place last night and met a friend who lives around there for a celebratory pint...only had three but the £16 spent was painful when I’ve been doing well. Previously I wouldn’t have stopped at three though so I guess there’s some progress. Plus I’d do that a few times a week and buy food... It’s progress that I’m more conscious of spending though. Can’t wait until my expensive July is out of the way.

Jox

I spent my twenties drinking a lot while working in advertising and eating out and buying rounds for people I don't see anymore, I was drinking up to 4 times a week by the time I reached 29 and thought enough is enough and stopped and saved up and bought a flat! I was spending hundreds every month on booze and eating out. Can't change the past but I wish I hadn't lol

ryanm8655

So the first of the expensive events is out of the way.

A bit annoyed with myself as didn’t manage to hold back on the spending well at all...the only positive is I used my debit card and didn’t use credit.

Have spent all of the money I made on eBay in one weekend :-/ Keeping up with people who earn 3 times what you do isn’t smart...

Now need to try and refocus and learn from the experience.

Wedding on the 6th next, which is all paid for. Then a stag do on the 13th but it’s a one dayer this time so should be less painful as long as I’m not a moron again...maybe the answer is leaving my debit card at home.

Fiona_CW

Don't take your card. Set a budget and withdraw that amount of cash and take that.

ryanm8655

Had some positive financial news (less so for my friend). The wedding in August has been called off as has the stag do...

So my expensive next couple of months is considerably less so.

Jox

Oh dear, that's a shame for your friend....

BabyStepper

ryanm8655 wrote: »

Had some positive financial news (less so for my friend). The wedding in August has been called off as has the stag do...

So my expensive next couple of months is considerably less so.

:rotfl::rotfl::rotfl:
You're a true MSE-er now! It's a real moment when your first thought about your mate's cancelled wedding is 'great, I can save some cash and pay off more debt!'
Seriously though, you're doing amazingly well. Keep going. Paying this off is entirely possible.

enthusiasticsaver

rachelgreen3691 wrote: »

Benefits of availing debt consolidation loans:

• Many lenders provide convenient options to avail debt consolidation loans at considerable, but affordable APR.
• You can borrow debt consolidation loans to consolidate your impending debts and dues and pay them off all at once.
• Most debt consolidation loans are unsecured loans, so there is no fear of losing an asset.
• They are available for people with all types of credit histories, irrespective of their scores.
• The repayment schedule is pre-planned with fixed APR and loan amount, which allows planning of the budget.
• Timely payment of debt consolidation loans can help in building your credit record.

Drawbacks of debt consolidation loans

The rate is often not particularly good as lenders will not assume the loan will repay existing debt so the application is scored with existing debt plus the new debt consolidation debt.

There is nothing to stop the borrower repaying the existing debts with the loan then continuing to spend on credit so before long they have a loan plus credit cards effectively doubling the debt. Many, many people on here have done just that and said consolidating debt was the worst thing they did and did not help them.

Credit cards are also unsecured debts so no difference between them and a loan except often if you have a good record you can get a 0% one which is obviously cheaper than a loan and normally are repaid in a shorter time period making it the cheapest form of borrowing.

Anyone who has a poor credit history will pay dearly for an unsecured loan. The headline rates are only available to those with the best records.

Building up a credit score is done most effectively by using a credit card and repaying it in full each month.

Advising debt consolidation is almost always a recipe for disaster. It is not repaying debt, just moving it and without proper budgeting going forward the debtor usually increases their debt rather than reduce it. As debt consolidation loans are usually over a 5 or sometimes even longer time frame the interest charges are much higher than if someone properly addressed their debt on credit cards etc and repaid it ASAP by cutting back, budgeting better, moving cards to 0% if they can or tackling the most expensive debts first.