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Consolidation

Loobyloo1234
Loobyloo1234 Posts: 1 Newbie
edited Today at 2:01PM in Debt-free wannabe
Looking for some on advice on whether a loan or a cc is best for consolidation? 

Comments

  • MyRealNameToo
    MyRealNameToo Posts: 1,795 Forumite
    1,000 Posts Name Dropper
    Looking for some on advice on whether a loan or a cc is best for consolidation? 
    Boards generally dont like consolidation at all as most dont go on to pay off the consolidated debt but instead accrue more debt. 

    All depends on what you can get and at what APRs. A CC can be cheaper but unless you can be sure of paying it off in full within the interest free period you run the risk that when this deal comes to an end you can't get another so the interest jumps to 20%+ . Loans will have a higher interest rate so cost more but once secured you know the rate won't change during the duration of the loan which may give you more comfort if you need more time to repay than the maximum duration a CC will give you. 
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,650 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Looking for some on advice on whether a loan or a cc is best for consolidation? 
    If you have debt problems go over to the Debtfree Wannabe board for the best advice, and yes consolidation is not the way forward.
    If you go down to the woods today you better not go alone.
  • Nasqueron
    Nasqueron Posts: 10,985 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Banks see consolidation as new debt + old debt as no guarantee you will pay the old debt off so they have to consider if you can afford both debts and that will be whether you get the loan or how much. Also, a CC for consolidation doesn't really mean much - you could balance transfer existing CC debts but you can't use a CC for loans for example

    Sam Vimes' Boots Theory of Socioeconomic Unfairness: 

    People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.

  • MyRealNameToo
    MyRealNameToo Posts: 1,795 Forumite
    1,000 Posts Name Dropper
    edited Today at 11:44AM
    Nasqueron said:
    Also, a CC for consolidation doesn't really mean much - you could balance transfer existing CC debts but you can't use a CC for loans for example
    You can thanks to Money Transfer cards... in my experience at least most cards that offer BT also offer MT though the fees for MT tend to be slightly higher. 
  • Brie
    Brie Posts: 15,355 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    If you already have a CC with a 0% offer on it (or which regularly offers them) then that is a good option to buy yourself some time to get the source of the debts sorted out.  But taking on more credit can, as already mentioned, just aggravate the problem.  

    I'll get this moved to the debtfree wannabee board.  Have a look for the statement of accounts (SOA, see the link in my signature below) fill that out and copy it in to this post and the regulars there will be able to see if there are things that can be tweaked in your budget to point you to a debt solution. 
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  • Nasqueron
    Nasqueron Posts: 10,985 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Nasqueron said:
    Also, a CC for consolidation doesn't really mean much - you could balance transfer existing CC debts but you can't use a CC for loans for example
    You can thanks to Money Transfer cards... in my experience at least most cards that offer BT also offer MT though the fees for MT tend to be slightly higher. 
    Yes I meant BT for loans

    I find cards are a bit hit and miss, Barclays, Halifax/Lloyds do both offers, MT shorter and higher fee yes but others are more restrictive

    Sam Vimes' Boots Theory of Socioeconomic Unfairness: 

    People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.

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