Debt consolidation loan for high credit card usage
in Debt-free wannabe
12 replies 1.3K views
I'm looking for a way to reduce my monthly payments on my credit cards and I was wondering if a debt consolidation loan would be appropriate for this.
I've got around £4700 in debt, with Aqua, Barclaycard, Capital One, Vanquis, Zopa and Tesco. I also have a £500 overdraft with Monzo which is rarely used. Most of this debt (around £2500) is with Aqua at 59.9%. Vanquis and Zopa are at the same interest rate with around £700 with Vanquis and £100 with Zopa. The rest of my cards have a 39.9% APR interest rate.
I've been offered a 3 year loan with Natwest at 30% APR which works out to about £190 per month, and I pay roughly £290 per month with my current direct debits.
I have always paid at least the minimum payment due on time and I've never gone over limit with any of my cards. My combined credit limit for all cards is £6350.
I'm 19, living at home with parents after recently moving back in (most of this debt was incurred when I was living by myself on minimum wage & SSP) and I don't pay for housekeeping etc at the moment. I make roughly £1100 per month working full time.
Once these are paid off I would like to continue using my Tesco and Barclaycard cards because of the Clubcard points and cashback, and potentially my Capital One card as that's the card I've had longest. The credit limit on these cards isn't massive so I won't overspend on them (will never go above 25% utilisation and would have a combined £1600 limit). I would like to know how my credit score will improve/get worse (roughly 600 on Clearscore at the moment). I'd also like to know if it'd be worth completely shutting down my Aqua, Vanquis and Zopa accounts once I've paid them off with the loan.
Any advice or pointers would be much appreciated.
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