Help needed on debt consolidation

CharlieB2012

Hi all,
Coronavirus is hitting hard and there’s one monthly expense I can’t seem to improve. I have approximately £4.5k with RateSetter at 14.9% APR, over 5 years. I’m one year in and paying £116 a month. I could really do with lowering this payment but I’m not experienced with debt consolidation. Any help/ suggestions would be massively appreciated. 

Thank you!

[Deleted User]

Hi, it's never the best idea to borrow money to pay off debt, unless you can 1) get a much better rate and 2) wait till you clear the debt before taking on more debt.

MEM62

The accepted wisdom is that consolidation loans do not work.  You cannot borrow your way out of debt.  

DCFC79

CharlieB2012 said:

Hi all,
Coronavirus is hitting hard and there’s one monthly expense I can’t seem to improve. I have approximately £4.5k with RateSetter at 14.9% APR, over 5 years. I’m one year in and paying £116 a month. I could really do with lowering this payment but I’m not experienced with debt consolidation. Any help/ suggestions would be massively appreciated. 

Thank you!

I see 2 options, you either increase your income OR you reduce your spending.

when I say reduce your spending I mean look at your bank statements and look where your money is going and plan to stop that spend eg buy food shopping at Aldi/Lidl.

Maybe you need to post on the debt free wannabee board for help.

https://forums.moneysavingexpert.com/categories/debt-free-wannabe

A consolidation loan will only work if your very strict with your spending and if your not you could be in the same position.

sourcrates

CharlieB2012 said:

I’m not experienced with debt consolidation. Any help/ suggestions would be massively appreciated. 

Thank you!

And you should stay that way, avoid it like the plauge, and you`ll be just fine, you`ll avoid repeating the same financial mistakes, often multiple times, and then ultimitly you will avoid the bankrupcy court, again, maybe more than once.

Consolodation just makes money for the banks, keeps you in debt, and most people who do consolodate, do so numerous times, and usually end up in some kind of debt solution.

I think that`s a pretty clear and fair assessment of debt consolodation.

fatbelly

You know you can ask for a payment holiday - at least buy yourself some time.

https://www.nationaldebtline.org/EW/factsheets/Pages/coronavirus-advice-and-support/help-and-advice.aspx

enthusiasticsaver

History shows us that debt consolidation rarely if ever works in helping people pay off debt.  It just postpones the problem until either the debtor needs to move to some sort of debt solution or they get on top of their budget and start actually paying the debt off.  
You can ask for a payment holiday but that interest rate is not low so bear in mind even if they agree to a payment holiday you will still be paying interest at almost 15%. Can you reduce other outgoings?