Credit card repayment options

Hello there, I'm new to this forum and am looking some advice on how to proceed with the financial predicament I've gotten myself into. I have 6 creditors to whom I owe varying degrees of money.

I have spoken with some debt charities. One seemed to imply an IVA was my best option as it was more secure. After researching some more online, I'm definitely now veering towards a DMP over an IVA, but before going ahead with that I'm strongly considering trying to catch up with the arrears on the credit cards as best I can by setting up personal monthly payment arrangements, after which, at some point in the future, I would apply for a bank loan to consolidate the debts, hopefully with a reasonable interest rate.

There are some questions I'm hoping someone out there might be able to help me answer:

(1) Is this course of action feasible and/or wise, or should I just go ahead with a DVA now instead of trying to sort it myself first?

(2) If I try to sort it myself without a DVA, are there certain repayment arrangement options that would be preferable to request?

(3) If I manage to get on top of my credit card repayments myself, should I wait to apply for a loan to consolidate the debts, ie until the improved financial situation is reflected in my credit score?

(4) Is there a downside? As far as I can see, even if I try this and the loan application is rejected, I'll still be in the same boat and could go ahead with a DMP anyway.

Any advice anyone could provide would be greatly appreciated.

Thanks, Paul.


  • grumbler
    grumbler Posts: 58,629
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     Debt-free wannabe   board is a better place for this sort of questions.
  • MorningcoffeeIV
    MorningcoffeeIV Posts: 1,889
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    edited 24 February 2023 at 11:11AM
    Forget about 3).

    When you've borrowed too much money, borrowing more money is not the answer.

    Even if you could get a loan, which you won't.
  • The issue with taking out a consolidation loan is that, unless you address the underlying cause of the debts, then the likelihood is that you very quickly find yourself saddled with double the debt - the new loan, and the "old" debts which you've racked up again.
    Aside from that, you'll likely find it difficult to obtain a loan anyway.  Any lender has to take the view that a loan would be in addition to, not instead of, your existing debt - they have no guarantee that you would actually use the loan to clear the debts.  So when they run their affordability checks, you may find you're declined - or offered a horrendous rate of interest.
    As Grumbler says, the Debt-Free Wannabe board is a great place to start.
  • I understand what you're saying regarding not getting out another loan to pay of the previous debts, though wouldn't this negate the entire concept of consolidation loans or money transfer cards?

    Thank you for your replies though and apologies for posting this in the incorrect section. I will post it again in the Debt-Free Wannabe forum just to see if I can get any more advice and/or opinions, especially regarding whether a DMP or IVA would be a preferable solution.

    Again, though, thanks and sorry.

    Regards, Paul.
  • born_again
    born_again Posts: 13,600
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    I understand what you're saying regarding not getting out another loan to pay of the previous debts, though wouldn't this negate the entire concept of consolidation loans or money transfer cards?

    Regards, Paul.
    The reason is more that people take out these consolidation loans. But never cancel the cards when paid off. So they end up using them, as building up a even bigger debt.

    In reality when taking out a 
    consolidation loan. The lender should be paying off the cards direct & making sure they are closed down.
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