Best option to Debt

CornishHome Forumite Posts: 1 Newbie
edited 8 December 2022 at 12:00PM in Debt-free wannabe
I have got myself into some financial problems. I currently have several loans and wondered what my options are going forward. 
I am paying these each month, but I am struggling with it. I am hoping to sell my house soon, so I should be able to clear the debt then, but what are my options until this happens. I do not want to go down the IVA route as I am intending to get a mortgage again in the future. I was thinking of a consolidation loan, but I don’t know how these work and don’t think any company would lend me anymore money, even though I wouldn’t be any further in debt by doing this. 
Any help would be appreciate as I really don’t know where to turn with this. 


  • Ebe_Scrooge
    Ebe_Scrooge Forumite Posts: 7,320
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    edited 6 December 2022 at 12:27PM
    Consolidation loans are very rarely a good idea.  Quite apart from anything else, a lender has to make the assumption that a new loan will be in addition to, not instead of, your existing debt.  They have no way to guarantee that you'd actually use the new loan to repay the old ones, so their affordability calculations will be based on you having twice the debt you've currently got.  Consequently, you may not be offered a loan at all - or, if you are, it's likely to be at a pretty high rate of interest.
    How long until you sell the house, and can you manage to keep up existing loan payments until then?  That would be the simplest option.
    Other than that, head on over to the Debt-Free Wannabe board and post up an SOA.  There are plenty of helpful folk who will be able to take an objective look at your income and outgoings, and suggest areas where it would be possible to make savings.
  • cymruchris
    cymruchris Forumite Posts: 4,528
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    and don’t think any company would lend me anymore money, even though I wouldn’t be any further in debt by doing this. 

    On the first part you're likely right - if you have a number of loans already, the chances of taking on further loans is less likely. Any potential lender will look at your outstanding balances across all of your credit accounts (let's say for the sake of argument this is £20k) - and that you are applying for a £20k loan to pay off this balance. The risk is that you blow the £20k on a holiday, a new laptop and a car, and then have £40k worth of debt. Yes your intention is to pay off the existing finance - but as soon as the money landed in your account, the lender has no control of what you do with it. So from a risk perspective you're not in a great position. 

    Is the house already on the market? If not, when do you envisage it to be on the market?

    In the meantime have you had a really critical look at your expenditure? (And I mean critical!) to see what you're spending, and what you could cut? Any streaming services? tv packages? broadband packages? mobile phone contracts? that could be reduced by opting for a lower cost option or suspended? Are there items in the cupboards you've bought but never use? (Ebay the lot - you'll only get pennies to the pound on what you paid - but money in the bank is more important than stuff in the cupboard).
    An ex-bankrupt on a journey of recovery. Feel free to send me a DM reference credit building credit cards from the usual suspects :) Happy to help others going through what I've been through!
  • EssexHebridean
    EssexHebridean Forumite Posts: 19,007
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    This would be better placed over on DFW really. 

    Definitely no to any consolidation - this simply pushes the problem down the line, it doesn't cure it if the root cause of the debt hasn't been sorted out. 

    You could ask the forum team to love the post to DFW (use the report function (if you can report your own thread?)  and select the "needs moving or merging" option - then request a move of the thread in the notes box) then as said - prepare and post your SOA and we could offer suggestions from there. 

    What is the score with selling the house - will you not need the proceeds to find somewhere else to live? 
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