Debt Consolidation - Help

KQM · 8 December 2019 at 7:53PM

Hello everyone,

I have been lurking for a while, but finally accepted I need help to clear my debts. This including talking to my husband tonight about how bad it is. He kindly offered to get a loan in his name to consolidate my debts but the APR has come back higher than advertised and would mean paying approx £3.5K in interest with a 5 year loan.

I have been working away at my debt for a for a while and managed to save money along side it so I am not tempted to use the plastic this Christmas. I have acutally cut them all up so I am not tempted to spend.
I have a plan in place to have it all cleared by March 2021, but we are really wanting to start a family in the next year and buy the house from my parents which we are currently renting for a fraction of what its worth.

If I continue with my plan to pay off the debts, I will have zero safety net for starting a family or towards mortgage costs. (my parents have said they will gift a deposit, so while I would like to add to that, we don't need huge amounts saved).

I guess I am just looking for advice on what the best option is as my head is hurting with it all.

Any suggestions welcome

-taff · 8 December 2019 at 8:42PM

Dont consolidate unless the total you will pay back is less than you are paying in total now should you continue as you are. And will take the same or less time.

EssexHebridean · 9 December 2019 at 4:26PM

OK - first thing first is to put together your SOA (Statement of Affairs) which will then form the basis of your household budget. Until you've done that you don't have a full picture of how your finances work (or possibly currently, don't work!) and from that, what you can do to clear the debt quicker. The link to the SOA calculator we recommend can be found in my signature below. Format for MSE at the end, post into this thread, and then we can take a look and hopefully spot some areas you can make some savings!

enthusiasticsaver · 9 December 2019 at 8:05PM

I would deal with the debts first as if you apply for a mortgage with debts that will affect the amount they will lend you. I certainly would sort both those out before starting a family as you will be living on reduced income due to maternity leave and have higher expenses after due to the high cost of childcare. Or delay buying until after having a baby especially if you are on a reduced rent and your family are your landlord.