Do I consolidate

in Debt-free wannabe
16 replies 2.2K views
Hi, I'm looking for advise and hoping you can help.
I have 3 credit cards and I've worked out to completely repay it'll probably take about 7 years. I also have an upcoming holiday and needing to pay my part which is £780.
I've been offered a pre-approved loan that would cover all of these and would be repaid in 18 months. The interest rate of the loan is the same as only one of the c/cards, whereas as the moment I'm paying 3 lots of interest ranging between 24-34%. 
I know I can afford the monthly repayment, as it's what I'm paying now but will take much less time to re-pay, am I overthinking taking the loan and consolidating?
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Replies

  • cheeky-peachcheeky-peach Forumite
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    I know the message usually is 'DO NOT CONSOLIDATE' but I think if you are comfortable with the repayments AND you cancel all 3 cards it could be an option. You do not want to put yourself in a position where you take a loan, pay off all cards down to zero and then find yourself slowly spending on said cards again and having not only a monthly loan repayment, but 3 credit cards potentially being back to where you started. How do you feel about cancelling the cards as soon as you are able to repay?
  • rowas02rowas02 Forumite
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    Thanks cheeky-peach for replying, the cards are already cut up so I have no access to them as it is, so cancelling them is not an issue
  • SncjwSncjw Forumite
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    Why can't you over pay your card now. 7 years to 18 months is a big jump..are the repayments higher. 
  • sammyjammysammyjammy Forumite
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    I disagree, don't so it, sounds like you are going to take out a loan to not only cover the credit cards but to cover your £780 holiday costs.  Really bad idea, make a plan to pay off the credit cards quicker or get a 0% card to swap the balance over if you can.

    Cutting the cards up is great but its pretty easy to ring them up and request a new one!  
    "You've been reading SOS when it's just your clock reading 5:05 "
  • MEM62MEM62 Forumite
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    Unlikely that switching to a loan would reduce the repayment time from 7 years to 18 months and you are proposing to add the cost of a holiday to your borrowing.  The issue with consolidation is that most are taking a seriously unrealistic (deluded) view of their finances at the time in order to convince themselves that further borrowing is a good idea despite the fact that they cannot manage the debt that they already have.  Borrow more and you are most likely on the slippery slope to some serious financial misery.  You cannot borrow your way out of debt.           
  • Phantom151Phantom151 Forumite
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    As long as you still have spare cash after the repayment, go for it. If it will be borderline then better not to. I went down the consolidation route and never used a credit card again that I don't pay off in full every month (reward card)
  • izawaizawa Forumite
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    You have debt, why are you thinking of holiday? Debt repayment comes first. Pls consider that.
    I am relationship expert. Don't feel shy, say hello.
  • rowas02rowas02 Forumite
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    Thanks for everyone's comments, judgemental or not. I intend to cancel all credit cards, actually did one yesterday after clearing it, and yes for those skeptical, the repayment time jump is huge but one I can afford due to reducing interest paid by only having 1 outlay, not 4 and still paying out the same amount as I pay out now.
    I'll update you all as it goes
  • sammyjammysammyjammy Forumite
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    Clearly you've made your mind up so wish you good luck, hope we don't see you back here again unless its looking for money saving tips!
    "You've been reading SOS when it's just your clock reading 5:05 "
  • KaronherKaronher Forumite
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    Just make sure you budget from now on or you could end up with a loan to repay and credit card payments. Even if you dont post it, fill in an SOA and see what you can afford to live on each month.
    Aiming to make £7,500 online in 2022
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