Should I take a loan?

Mr_T_5

Not too sure if this is the right section but any advice would be most appreciated.

I have currently graduated and am about to enter full time employment in london as of mid July, I have a mortgage on my current property and intend to rent it out whilst I rent in london. I am currently sitting with about 5K of debt (not including student loans) which is made up of:

one student account with a 2K interest free overdraft (this will be able to be kept for a couple more years)

Another account with 1K interest free overdraft - likely to be cut in the next month or so ie converted to high interest

2K on a credit card - 0% interest for 9 months with M&S


On the flip side I have about 2K in an Isa which was being saved for a rainy day.

My problem is that the upfront costs of moving to London are quite large - I intend to rent and the palce I am moving into requires including deposit and a month in advance in the region of £1500 - followed by another £500 early august so lets say 2K.

I am not sure what to do in order to manage my finances, I think there are several options available-

Take out one loans to consolidate my finances and "start a fresh" but this probably means paying more in the long run.

Remortgage my current property and add my overdrafts and so forth onto my existing mortgage - but this means higher monthly payments.

Keep things the way they are and borrow on a credit card in the short term... but the prospect of having so many accounts and cards in debt is depressing!

I suppose my main concern is that taking out a loan or refinancing may lead me to paying more in the long run and there is a chance that I will enter into greater debts then what I started with But in doing this I will be able to have an account with some visible money in even though there will be a constent monthly payment coming out.

Any help/advice would be most appreciated.

[Deleted User]

You need £2k to finance your move. You have £2k in an ISA.

Of your loans the most pressing is the one that starts charging you interest next month.

If you are working or about to be your income will eventually help you to pay off what you owe. If I was you I'd try and lay my hands on another £1k that might be raised from any other savings (but not more loans), selling off what you don't need etc... working a second job for a few weeks?

Use that plus your ISA to pay off the overdraft that starts charging you interest next month - plus also to finance your move to London.

Once you are earning you can start paying off as big a chunk as you can manage on your other debts.

Keep shuffling the credit card debt around the 0%s as long as you can. For the time being you can make minimum payments on those (but only to tide you over till you are earning!) Your situation is not actually that bad. Forget considation debts and remortgaging to release equity. It will only cost you more and give you the feeling of having sorted out your debt when in actual fact you haven't 'cos you still have it!

Can you not move to anything a bit cheaper initially just till your first wage packet comes in? Or commute even?

Mr_T_5

Cheers Deleted_User,

thanks for the advice - I will attempt to stay clear of consolidation and remortgaging for now. Unfortunately commuting etc is not really an option also given that I need to move in the next three weeks and to be honest the rent is extremely good for the area. Will just have to budget tightly to get through this short term liquidity constraint!