Advice for a friend

vintagegirl

Hi there looking for advice for a friend who’s not on here.

He has some debts and wants to try and put them
Altogether as he gets paid weekly and the Payments are all over the place. He isn’t struggling with the amounts,

He has the following with the following interest rates

Capital one credit card £345 at 26.9%
Capital one credit card £350 at 26.9%
Couch £33.31 per month at 0%
Car loan at £165 a month at 8.9%
Personal loan at £101 per month 12.9%
Personal loan at £186 at 15.9%

He has been approved for a loan of £20k at 15.9% which would consolidate everything together
Or a £15k loan at 15.9% and a 0% cc with £5000 limit so was considering paying off 1 loan and the 2 credit cards with that at 0%

Any ideas which would be best

WhenIam64

He has been approved for a loan of £20k at 15.9% which would consolidate everything together

Loan consolidation is not a good idea so would not be recommended. The lowish level of debt over multiple sources suggests that the friend is on low income and may not have any assets (to sell to clear the debts)

It would be much better if the friend were to produce a Statement of Accounts showing income and expenditure to see if the high cost debt could be paid down freeing more cash for the lower interest items.

Tackling the need for credit is better than suggesting more credit.

warby68

The only reason to consolidate is if the interest rates become hugely favourable and here its only a couple of very small debts that are at higher rates than the loan so that one justification is not there.

As above its an SoA that's needed to assist and more debt rarely works.

The £5k interest free card switch might be useful but actually might be more useful as an emergency fund while debt is sorted.

Exodi

vintagegirl wrote: »

Capital one credit card £345 at 26.9%
Capital one credit card £350 at 26.9%
Couch £33.31 per month at 0%
Car loan at £165 a month at 8.9%
Personal loan at £101 per month 12.9%
Personal loan at £186 at 15.9%

He has been approved for a loan of £20k at 15.9% which would consolidate everything together
Or a £15k loan at 15.9% and a 0% cc with £5000 limit so was considering paying off 1 loan and the 2 credit cards with that at 0%

Any ideas which would be best

Are the figures you've provided all monthly? It's impossible to work out the possible savings of a consolidation if we don't know the balances.

This forum has a strong aversion to consolidation loans, and for good reasons. It's very common that people buy into the false economy of consolidating their loans; admittedly lowering their monthly payment but start to spend again.

It would be much more practical to ask him to create an account on here and post a Statement of Affairs showing his income and expenditure. Being able to make some quick savings to his outgoings could pay dividends if he was able to pay off the high APR loans early.

zippygeorgeandben

Yes don't consolidate. Unless you want to extend your lifetime of debt.