Consolidate Loans?

FashionHeart

MrsBee000 said:

I owe £11,000 over four credit cards, all on 0% (except for about £900) however, it gets a bit overwhelming seeing four balances and having to remember the 0% expiry dates on various different balance transfers and having to keep jigging them around.

I know if I applied for a personal loan to consolidate my borrowing the lender only has my word that I will pay off the other borrowing so, as far as they're aware, it will just be another debt I'm incurring.

Is there anyway of consolidating my loans so that I just have one payment per month with one expiry date?

Thanks

Have you tried all the different comparison websites to see if you can get a loan?
I was in the same situation - but for 12k, and was fortunate enough to consolidate my loans only just last week and this is how I refinanced my debts.

enthusiasticsaver

It makes no financial sense to move debt from 0% cards to a loan and as you have already said you are unlikely to get a good rate anyway.  At least at the moment all the repayments you are making are coming off the amount owed and not interest.  However in the long run minimums alone will not do the job even on interest free.  The section 75 protection is a red herring really as very little needs to be put on credit and ideally you should be saving for the big ticket items and paying it off immediately or at least within the deal period. 

I would look to cut back as far as possible on other things and focus on clearing the cards one at a time, ideally with the one where the interest free period runs out first.  

I would caution anyone against consolidating debts.  It rarely works unless the borrower changes spending habits and gets rid of the cards once they are paid off.  Most people don't do that though and a lot consolidate two, three or more times before realising they aren't getting anywhere and the debt is much higher. It takes longer to repay it and costs a lot more. 

sourcrates

real_name_hidden said:

I consolidated debt my debt and ended up putting more on cards, then would consolidate again.  It doesn't work.  OH wanted just one monthly payment as it would be "easier" but this just gave us opportunity to spend more.  Personally, if I had my time again, I would use the snowball method on my credit cards.  Consolidation, though "tidies things up" is just as messy in end and will cost you more.

This post profoundly sums up the pitfalls of consolidation in one paragraph.

You always think it will free up extra money, but that extra money just gives you an excuse to spend again, and again, and again, and before too long, your back in more debt, but now you also have a consolidation loan to pay as well.

Ask any ex bankrupt "how many times did you consolidate your debt" ?

There answer is likely to be twice or more, at least, it seldom provides the solution you are looking for.

As things stand, you can afford the minimums, I would say try to increase your payments by 10% or so, to avoid persistent debt rules, maybe cut back elsewhere, the interest is crippling, yes, but the only way to stop the interest is to default, and that opens up a whole new world I don`t think you are ready for yet.

FashionHeart

sourcrates said:

real_name_hidden said:

I consolidated debt my debt and ended up putting more on cards, then would consolidate again.  It doesn't work.  OH wanted just one monthly payment as it would be "easier" but this just gave us opportunity to spend more.  Personally, if I had my time again, I would use the snowball method on my credit cards.  Consolidation, though "tidies things up" is just as messy in end and will cost you more.

This post profoundly sums up the pitfalls of consolidation in one paragraph.

You always think it will free up extra money, but that extra money just gives you an excuse to spend again, and again, and again, and before too long, your back in more debt, but now you also have a consolidation loan to pay as well.

Ask any ex bankrupt "how many times did you consolidate your debt" ?

There answer is likely to be twice or more, at least, it seldom provides the solution you are looking for.

As things stand, you can afford the minimums, I would say try to increase your payments by 10% or so, to avoid persistent debt rules, maybe cut back elsewhere, the interest is crippling, yes, but the only way to stop the interest is to default, and that opens up a whole new world I don`t think you are ready for yet.

Whenever I have money left over after paying all of the bills, I always make this opportunity to reduce my repayments to a minimum by making overpayments to lenders.
This helped me a lot with my finances as I know that I am in CONTROL of it.
It may not work for a lot of people, but it's better than spending money on something unnecessarily.