50K on credit cards and drowning

MoneyWolf45

I don’t know where to start between me and my other half we have an extortionate amount on credit cards. Some on 0% and some are on an apr. Do we try to get a consolidation loan or what do we do? I am lost.

TadleyBaggie

Consolidation loans rarely help, and often make this worse. The root cause of the overspending must addressed, you can't borrow your way out of debt.

Head to the Debt Free Wannabe forum for help.

CliveOfIndia

Consolidation loans are very rarely a good idea.  Firstly, unless you address the root cause of the debt, it's all too easy to simply get a loan, clear the cards, then start racking up fresh debt on them.

Added to which, you'd be highly unlikely to get a loan - £50K is way above the limit that most lenders would consider for an unsecured personal loan.  Plus, since they cannot guarantee that you'd actually use the loan top clear the cards, they have to assume that any loan would be in addition to - not instead of - your existing debt.

And please - don't even think about re-mortgaging to clear the debts.

Complete an SOA (https://www.lemonfool.co.uk/financecalculators/soa.php), use the "Format for MSE" option and post it up on the Debt-Free Wannabe board.  You'll get loads of impartial and helpful advice there.

MoneyWolf45

I don’t know where to start between me and my other half we have an extortionate amount on credit cards. Some on 0% and some are on an apr. Do we try to get a consolidation loan or what do we do? I am lost.

Misslayed

You've made a good start coming here for support and advice. There are some very knowledgeable, experienced and non-judgmental folk here who will help you, they'll be here before too long. 

Brie

Consolidation loan? No.  Assuming you can even get one to cover what you owe would mean that you have such good credit that someone believes you should have £100k credit available.  If you were to get a loan for £50k to pay off the rest there's no guarantee that you would so would then be paying the £50k on cards plus the loan.  

You need to put together a statement of accounts (see the top sticky in DebtFree) and then post that here.  The lovely friendly people (seriously they are) will have lots of good ideas to help you out.  Might be cutting out certain spending, might be questioning whether you could increase your income.  

enthusiasticsaver

No a consolidation loan is not the option you should go for.  It inevitably leads to the debt getting bigger.  

There is no easy answer to getting rid of loans and credit cards but basically it involves a lot of financial discipline, budgeting and accounting for every penny and getting in the habit of  saving rather than spending on plastic.  

As others have said do an soa and be honest about how much you are spending now.  £50k is a lot of unsecured debt and it may involve some sort of debt management tool. Are you managing to make at least minimums WITHOUT putting money back on the cards to live? 

SOA Calculator (lemonfool.co.uk)

MoneyWolf45

We are paying all of our bills ok but just want to be rid of this debt. Thank you for your advice I will look at Lemonfool. Really appreciate you commenting!

Cotswoldtony

Hi, this is a very helpful site however each case is different depending on many factors only known by yourselves.

Most cases of debt are based on change of circumstances either personal or by events out of your control.

If you have over spent in the good times but now your income has reduced or not kept up with inflation/ higher interest payments

this site can help if you have a good regular income to restructure with some lifestyle changes.

Your credit cards debt is out of control and interest payments will not help you repay the debt especially if you are both jointly/severally liable. 

If you have a large amount of credit card debt this usually means you have good jobs/salaries with possible home equity so perhaps a total lifestyle change would be in your best interests so you do have options.

Restructuring remembering to compartmentalize your finances to stop the future domino effect will be a positive way forward.

Partnerships are wonderful in a perfect world but in the real world it's like an overloaded ship with no water tight compartments that will sink fast in stormy weather.

kimwp

MoneyWolf45 said:

We are paying all of our bills ok but just want to be rid of this debt. Thank you for your advice I will look at Lemonfool. Really appreciate you commenting!

Select format for MSE on the lemonfool SOA webpage and post it on this thread to get the best advice on here. The more accurately it reflects your real spend, the more useful the advice. 

Stateofart

Unlike others, I do like a consolidation loan IF you are strict with yourself.  A consolidation loan can really help mentally I find but you do need to ensure you don't start spending again.