Balance transfer lifers

BalanceTransferLifer

Hi
I've been playing the balance transfer merry go round for at least15 years. 0% transfers has seen me save a fortune in interest in that time, however... I'm now at the point where the % of outstanding amounts versus total credit line on cards has breached 60% and i can not get any 0% transfers deals. I'm about to come to the end of my 0% rates on a lot of money and face enormous monthly interest rates I simply have no way of affording. I remortgaged my home a few years ago and have no real equity in it. Luckily i tied into a 5 year fixed mortgage just last year. I'm not sure what my options are. Budgeted and reduced where we can and my partner is looking for a better paying job but this isn't likely to touch the sides, especially in the short term. Should i go down the Debt consolidation loan route? Is this my only route? Really open to suggestions. 

Martico

Hi - to get the best help help here, we often suggest completing and sharing a Statement of Affairs (SOA), which would show your true financial position. Remember to add when different deals expire, and format for MSE before pasting in this thread if you're willing to share.

Debt consolidation loans rarely work - they just move the debt (and double the available credit, which risks you coming back in six months or so with twice the debt burden you currently have). 

I would imagine, without seeing your SOA, that budgeting needs a good look at. 

I'd also assume that you've been able to keep on top of the minimum monthly payments while you've been shuffling 0% deals. Those minimum monthly payments aren't about to change (though they'll now be subject to interest), so you may be able to keep on top of things. But that's impossible to tell without knowing the size of the debts or amount of income you have spare to throw at the debt.

Good luck!   

EssexHebridean

It's pretty unlikely that consolidation will work to be honest - it can do, in some rare cases, but generally speaking it's a huge no. You simply can't borrow your way out of debt. In real terms, if you are unable to get more 0% BT cards, it would be unlikely that you'd be able to access a loan at a vaguely sensible rate of interest anyway. 

Your first step is to complete you SOA (Statement of Affairs) as alluded to above - you will find a link to one of the calculators we recommend using in my signature.  You need to complete it openly and honestly, and it needs to reflect your situation right now, not what you think you should be spending. Once it's completed (and getting together a year's worth of bank and card statements might help you to get accurate figures in) then use the "format for MSE" option and copy and paste into this thread and we can take a look and hopefully offer you some suggestions.

My gut feeling is that budgeting is going to be the issue. How much debt did you start out with on the 0% cards and how much do you have now? Have you been working to overpay as you've gone along or is it just a case of paying minimums and then rolling the debt over to the next 0%? No shade wither way - it's just helpful to know. 

Are you still using credit cards at all now or are all your regular spends budgeted for (the SOA will shed light on this).

fatbelly

You're probably looking at the debt management plan route.

Please post a statement of affairs using Martico's link

Martico

I defer to Fatbelly in their knowledge of debt management solutions, always. They know their stuff.

BUT, if your SOA shows a way out without a debt management solution, I’d say that could be something to explore. Had I come to these boards in early 2020 with my debt and income as they were, I’ve no doubt that I’d have been strongly recommended to enter a DMP. I’m glad I didn’t, but fully appreciate that for many (most?) it’s the best option.

In my case, I learned to understand my own finances and start budgeting properly and dug my way out. That's been invaluable. I should stress that I also got myself new work that was better paid and more consistent. Three years later, I’ve turned a £25k debt burden into a £15k net positive position without entering debt management. But I’ve been “lucky” – much of that was budgeting properly; most, I admit, was gaining consistent work that paid better.

Conclusion? Don’t underestimate the power of strict budgeting. Even with those constraints I’ve seen friends, enjoyed myself, had a week’s break in Spain. But discipline has been at the fore.

We'd need to see an SOA before giving meaningful advice for your situation.

fatbelly

Yeah, I was sort of reacting to the 

Should i go down the Debt consolidation loan route? Is this my only route?

comment

It was a way of avoiding 'No' and  'No' 

BalanceTransferLifer

Thanks all, and yes a good honest budget is the way to go of course and something i have installed in 2023. But I have two months until I start paying a lot of high interest on £30k and so i kind of need something a bit short term whilst the budgeting will of course kick in over time plus my wife is (hopefully) getting a better paid job. I'm kind of at my ceiling in my career and earning potential at the moment. Why leave it so late i hear you ask. I didn't realize my credit balance vs credit line was going to have such a sudden negative effect when it hit 60%. So that kind of kicked our budget process in the low janglies. I now wonder if a smaller loan on shorter terms would help until our budgeting (and new wifes wage) has time to kick in? At least fend off most of the interest about to land? 

fatbelly

How would taking out further borrowing help you? 

Remember this is the Debt-free Wannabe board.

If you post a soa we can get you heading in that direction.

sourcrates

All consolidation loans do is move the debt sideways, keep you in debt for longer, and means you pay even more in interest, and its not something you do only once, people tend to consolidate their debts on a regular basis.

You can`t borrow your way out of debt, it never works out well.

BalanceTransferLifer

How would taking out further borrowing help you? Because it would be on an interest rate of half of that of the credit card when the interest free period ends and i don't have the funds to pay off the credit card balance? Therefore i'll be paying interest yes but it'll be less interest. 
Remember this is the Debt-free Wannabe board. Yes i obviously know that and yes i obviously want to be debt free. But i cant magically make that happen in the short term and leaving myself paying huge post balance transfer interest rates will not aid my attempts to become debt free. Instead perhaps i have to accept lower interest debt in the short term until my budgeting kicks in. As i said, I have already done the budgeting and in the format of your SOA myself. But the savings i make do not kick in soon enough, i.e. before the balance rates end. I have no equity in my house and bar eating pasta or baked beans, selling the TV, growing my hair and walking everywhere i don't see what else i can squeeze short term from budgeting that is going to assist in the next two months? I have checked my council tax band, i have shopped around on all insurance (via MSE) and i am on a 2% mortgage fixed with 4 years to run. I am of course grateful for the advice and i am all ears. What examples can you give me that you tend to find in someone's SOA that helps long term and long term?

BalanceTransferLifer

Sorry SHORT term and long term?  that should say