Consolidating credit cards with poor credir

Finding_Info

Hi, I have £12,000 worth of debt on credit cards. I pay around £700 a month to cover the payments. The interest is high on the repayments. If I were to consolidate the debt to reduce the amount of interest I currently pay across several cards I’d be able to pay off the debt much quicker. I am struggling to cover my usual bills on top of these £700 monthly payments. I recently moved house so am aware this will also affect my chances of getting credit. Is there anything you’d advise for someone with poor credit to consolidate this debt? The only thing I can think of is securing a loan against my house but this will also impact my partner’s credit. Or asking family members to help with my debt which doesn’t seem to be a viable option either.

Brie

Two things will be said with full force here - don't turn unsecured credit into secured credit (by putting the CCs on your mortgage) and don't get a consolidation loan - assuming you could actually get one.

I know it seems a good idea to reduce the amount of interest being charged.  But would your bank allow you to increase your mortgage and would anyone offer you a decent loan?  The answer is likely no either way.  The problem is that no matter what you say when you get the money that you'll pay off your cards there's nothing to stop you from blowing it all on the horses or on a flashy car or whatever.  And so your debt would be doubled - a loan PLUS the CCs.

Most banks if they have any suspicion that a mortgage increase is to pay off CCs will say no.  It's in their interest and yours and they would be hammered if they allowed you to get into more debt.  As for a loan - well you already have poor credit so why should anyone risk lending you more?  Anyone will look to see if you have the income to pay for all your essentials and then all your credit (cards, overdraft, phone contracts) AND a loan.  Generally the answer will be no.

So instead you need to find a way to lower your debt and your credit use and gain control over your life.  One way to do that is to post on here a statement of accounts (SOA) and the lovely people will give you ideas on how to tweak your budget.  You'll find the SOA on one of the top stickies.

Best of luck with this - £12k on the cards is not the worst we've seen and there is usually an answer to how to proceed.  We've done it so likely you can too.

ManyWays

If you have bad credit, any unsecured consolidation loan would be a really high interest rate. And a secured loan puts your house at risk. A debt management plan to get the interest stopped is usually a better option.  

fatbelly

Can you not get any 0% balance transfer offers?

https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/

That's going to be lower interest than consolidation loans and I note you are not saying that you are missing payments.

sourcrates

Finding_Info said:

Hi, I have £12,000 worth of debt on credit cards. I pay around £700 a month to cover the payments.

The interest is high on the repayments

I recently moved house so am aware this will also affect my chances of getting credit.

Is there anything you’d advise for someone with poor credit to consolidate this debt? 

This is the chance for you to stop what your doing, stop borrowing money you cannot afford to repay, and look at debt management options, which will be a far more sensible choice than consolidating this debt or God forbit, adding it to your mortgage.

You are 12k in the hole, you need to nip this in the bud now before you do something you will really end up regretting.