Debt consolidation - remortgage advice?

enthusiasticsaver

I am glad that you are closing down the credit accounts once the debt is moved to the loan.  I would explore options to overpay as soon as you are in a position to do so as 11% is a fairly high rate.  Opening a DFW diary may help you stay disciplined and keep you on track so you are not tempted to take out new credit cards after a few months when you feel your debt is under control.  What are the monthly repayments on the loan? 

EssexHebridean

stressedette said:

Unsecured Debts

Description....................Debt......Monthly...APR

RBS Loan.......................1400......425.......20.1

Lendable Loan..................1000......270.......23.65

Santander Card.................1970......60........23.9

Next Storecard.................300.......20........29.9

Capital One Card...............170.......15........34.9

Aqua Card......................230.......35........23.9

RBS Card.......................4900......135.......18.9

Overdraft......................2000......0.........39.9

Very Storecard.................1000......160.......44.9

Barclaycard....................3450......170.......24.9

MBNA Card......................1590......60........23.9[b]

Total unsecured debts..........18010.....1350......-  

I suspect you have already committed to the loan, but I am going to present an alternative scenario just in case.

So if I'm reading things correctly, then the two payments I have struck through are now finished? So that frees up the money you were paying to those (I take it that your increased salary now means that your budget balances - have you run through the SOA again with the new earnings figure to be sure of where you stand?

Personally I would use that very-nearly-£700 per month to first simply get shot of Next, Aqua and Capital One - no they aren't the highest rates, but they are the smallest debts, can be got rid of in a month, and simplify things a lot - plus closing the Next account at that stage will massively reduce the temptation to spend on it again.

In month 2, you would throw all surplus (now £765 just from the repayments you will no longer be making) at that gruesome Very card - that will account for some of Month 3 as well. once that is clear - again, it need closing pronto.

While this is going on, you need to ensure your budget is tight and functioning, and I'd strongly suggest using any additional surplus over and above the repayment money to start hammering down that overdraft. for simplicity, I would throw the balance of the M3 repayment money at the OD as well. 

By month 4 onwards, you should be able to firstly get rid of the remaining overdraft - remember that your tight budget means that will have been shrinking in any case, with luck. I would personally be reducing the available OD limit down a chunk at a time as well - although you may want to leave it it a few hundred pounds just as a "belt and braces" measure. The turn your attention to the larger balances, and obviously you need to attack those in interest rate order, so starting with the Barclaycard. the good news is that by that stage you will have over £900 per month to throw at those debts, and that will really start to make a massive difference. You will also have reduced your available credit level a lot - and that may well mean that you will begin to stand a chance of getting accepted for some 0% balance transfer cards - that is one to keep checking on every few months. 

My maths (pretty much fag-packet, so if others would like to check that would be helpful!)  suggests that using the above method and with proper budgeting you would be able to be debt free in somewhere around 2.5 years maximum, and that is pretty much just using the existing overpayment money, and not really counting any additional surplus that your increased earnings may provide. Yes - on the face of it you will be putting up with higher interest rates for some of that time, but you will also stand a chance of being able to shift some of the debt over to 0% as time moves on. 

If you have already committed to the loan, then time now to start feeding any surplus to overpaying it (hopefully that IS allowed?) and set yourself a target of getting it gone inside that 2.5 year period at the longest. If Overpayments are not allowed, and you are still within the cooling off period for it, then I would seriously look at cancelling and exploring a different route.

stressedette

As previously noted, I can't enter a DMP, and as I was servicing all my min payments, my interest rates were still high across a number of accounts. I have now moved what I owe essentially to this single loan, and closed all other credit accounts. 

@sourcrates I appreciate the luck - and I do take on board the general advice on consolidation. The point of coming back here to update was more about accountability moving forward than anything else! 

@backinbusiness I know 11% is not great - but some cards / accounts were sitting at at 40% - so this is much better. And also commits to paying back the full amount in a set time period, rather than servicing minimum payments for interest to be whacked on again. 

@MFWannabe - thank you. I am able to make overpayments and could pay off the loan early should I have any unexpected windfalls, bonus payments etc. A diary is a good idea.