Debt consolidation advice

Mickyc

Hi. Very new to this. 

I have 3 credit cards. 

1. £2800
2. 600
3. 2100
(£5400)
i dont have any problem paying off the minimum payments every month. But i know. This is all interest. 

I’m looking at how i consolidate them all without an iva. 

I dont no the apr on them. But i think around the 26apr mark. 

I’d like to just get rid of them all to one debt. Looked at a £6000 loan. But be paying back £9500. Over 4 years

Would this be cheaper than jus payin off the min payments of the cards. 

Sorry not much info. Just looking for some kind of advice. 

Thanks. 

RAS

Do not consolidate. All that does is move the debts side ways, it does NOT get rid of them. So you will wrack up more debt on the cards and have double the trouble in a couple of years. And generally, loans cost more even if you pay less each month, because it takes you more years to clear them.

Start by finding out the APRs and come back here. And be honest about how you got into this debt in the first place. It doesn't matter to us whether you got in a mess with job loss, crypto, or a high life, but you need to be honest with yourself

And go to lemonfool.co.uk and fill in their Statement of Affairs (SOA). That way you can understand why you don't have enough money to pay off your cards?

gwynlas

Ask yourself why you have three cards? Is there any chance you could get 0% or balance transfer at lower rate on any of them? Consolidating debt into loan to reduce payment could be a good idea but only if you are the mindset to close two accounts down and only use one for genuine emergencies. There are many of us on this forum who believed we could do this but got more heavily into debt, please learn from our mistakes.

Andyjflet

Don't consolidate, bad idea, what's stopping you upping your payments and paying them?

EssexHebridean

A full Statement of Affairs would enable far more nuanced suggestions here - I would agree with the fact that the best advice we can give on consolidation right now, with the information we have is "don't" though.

Ask yourself what you want to achieve - do you want to pay off these cards and leave yourself consumer-debt free? Or do you want to move the debt sideways, "tidy it up" if you like, but at the expensive of probably paying it off for longer, and at a higher cost? What would your plan be for the cards if you were to move the debt into a loan? Would you cut them all up and close the accounts?

Have you established what the cause of the debt is, and have you taken steps to address that to ensure that once the cards are cleared, you can keep control of your use of credit in the future? 

MEM62

Mickyc said:

I’d like to just get rid of them all to one debt. Looked at a £6000 loan. But be paying back £9500. Over 4 years

You cannot borrow your way out of debt.  It is also the case that debt consolidation does not work in the majority of cases as all it does is free up your cards for further spending.  By all means try for a balance transfer card if you can get one.  That will at least ease the burden of some of the interest.  Other than that it is a case of knuckling down, cutting your spending and throwing whatever extra cash you can at clearing your debt.  

enthusiasticsaver

I strongly recommend you do not consolidate. 
Can you get any 0% BT cards to move some to save on interest? 
Can you overpay to get the debts down quicker?
Have you done a budget so you know where your  money is going and saved for emergencies so you do not resort to more credit?

Consolidating on to a loan is a much more expensive way of  clearing credit cards and takes a lot longer as you can see from the illustration you have given.  No doubt you have already paid out a lot of interest if 26% is the rate you have been paying so in effect you have been paying double whatever was put on the cards initially.  Moving it on to a loan is tantamount to kicking the can down the road and there is no guarantee you will not build up credit card debt again so before you know it the debt will be £10k instead of £5k as your mind tells you that you have sorted out the cards when in effect all you have done is moved it. 

There is lots of advice on here as to how to actually clear the debts rather than shuffle them around. 

sparks_2023

You need to find out the APRs on each card, and look for cards with lower ( 0% ideal ) rates to move the balances to.

It would be good to get a quick win with the £600 card. Is there overtime you could do, or things you could sell to pay this one off ? Even small payment-a-day's will help and will concentrate your focus on paying that one off. Then without that monthly payment, attack the next one.

sourcrates

Debt consolidation advice -

Don`t under any circumstances under the sun, ever consolidate your debt, it doesn't work.

Signed 6 million previous debtors who consolidated their debts more than once, thinking it was the right thing to do.