Bank Loan - should I?

nikkikl

Hi all

This may well be a no-brainer for many but I am so tired of mulling everything over in my mind that I need a fresh perspective.

My husband has continued to run up debts on credit cards even after we paid them off - he is appalling with money and has no concept of saving whatsoever - not an unusual situation I know. Anyhoo, I live with that but now I have had enough and the credit cards have to go so he cannot use them regularly in the computer shop (even to the point of buying PC equipment for his company that still has not been paid back to us - HELLO!)

So, I spoke to Smile (my bank) about increasing the overdraft yesterday because for the first time ever, we have gone up to the limit AND over it. They increased it for me and they also, to my surprise, offered me a 9K loan at 6.6%. I used to sell loans etc for HSBC so I know all the tricks to get the loan protection etc etc but I did think 'hmmmmm, maybe'. I could stick all the credit cards into one lump, cut the lot up and keep a £500 limit CC for me only in case of an emergency.

I have got Capital One Plat card owing £1970.00, an HSBC Gold Card also £1970.00 and an MBNA card owing a whopping £8811.00 - I have already cut that one up!

I could ask them for a 12700 loan at 6.6 but I can only afford to pay it off over 84 months (no loan protection) at 199.00 a month. I am paying that on these three cards combined now per month.

Having worked in a bank on Sales (yes, I am ashamed to say that _pale_ ) I should know the best way forward, other than shutting the OH in the cupboard under the stairs to stop him spending) but my brain is soooo frazzled from thinking about it all out I am close to losing my marbles over it all. I have taken some rather drastic steps to cut down on the monthly spending and I think he is finally starting to understand that there really isn't a little pixie who pays extra money into the account every month to cover his excessive spending!

Please help before I lose the plot entirely!!!

Nikki
#x

callmybill

Hi

I don't know much about debt consolidation loans, but if you realy need a loan try:

http://www.moneybackbank.co.uk/loans/index.asp?page=home&src=schEC06579latgooglemoneyback3&exp=30

It's run by Alliance & leicester, loan rate is 5.7%

think carefully, 84 months is a looonnngggg time to pay off a loan, where as you may be able to consolidate your total debt onto a Capital One card at a lower rate and then be able to pay extra on to it in due course (pay rise, bonus etc).

just a thought!!!

nikkikl

Alliance and Leicester are not my favourite bank at the mo - I recently had a HUGE run in with them and closed down my premier account there, moved to Smile. So, I don't think my rating with A&L will be good - the argument was over incorrectly charged bank charges that took me over my limit so they will have me down as a bad debtor now, even though I'm not and even though they had to pay a load back to me. To be honest, following the hassle I had with A&L I was surprised that Smile offered me a loan although my account with them has always been very good. Maybe after the credit check they will have second thoughts!

nikkikl

Mind you, the credit limit on my Capital one card is 12500.00, so its a thought! Might call them and see what balance transfers they can offer me.

Thanks for that little thought - see, I knew I just needed a new perspective on it!

XXX

Edit to this one - I have called CapOne and unfortunately I couldn't understand a blinkin'word that the lady was saying to me so I just left it, will call them tomorrow. I think she said that the balance transfer rate was 12.something% - if so I will have a long haggle with them tomorrow. If they won't lower it to the 5.5 they mention on their website they can stick it.

Anyone got anymore ideas? A shuffle would be better than a completely new card account as I'm not confident on the credit score.

debtbuster2K5

Hi,
It depends on many factors. The first thing is understanding what interest rates you are paying on the credit cards and overdrafts. If you are able to secure a loan at cheaper rates then thats a tick in the box.

However.. You MUST think about why you have got to this situation in the first place. Set a realistic budget and ensure you include everything, Chop up all the cards and dont use them again.

The one massive risk with consolidating is that many people start spending again because they "feel" richer as they have less going out each month. They also think that the debts are "paid off" which obviously in truth is not the case.

So, with all things considered.. the choice is yours, but please explore other avenues first, such as 0% credit cards, as you could try snowballing your debts. See http://www.whatsthecost.com/snowball.aspx for more details.

Regards

nikkikl

Thanks for that advice and link debtbuster. I know exactly why I am in this mess - I didn't stop the OH from spending, took my eye off the ball, let him have what he wanted. Course, I should have known better and he won't have any credit cards to play with anymore thats for sure! Not positive on the APR on the credit cards so I will have to work that one out. Hopefully the overdraft is going to sort itself out at the end of the month and won't be used again.

I have gone to the extent of making OH sell his sports car (which I detest) which was drinking £250 a month on petrol and now he uses his moped for work - £20.00 a month petrol. I have also convinced him we cannot afford it, the insurance is £1000 a year as its an import. He has had his fun in it, it now has to go, so its up for sale. I am hoping he finally realises that we cannot maintain this lifestyle although we have been down this road before and he loses interest after a few days. It's truly the same as keeping a child who is spoilt and wants everything he sees in the toy shop - and I'm the stupid mum who buys it all for him.

Anyhoo, I know what I have done, I know what he has done and hopefully, I can sort it out, even if it takes years, which of course it will. Unless I win the lottery.

debtbuster2K5

Hi,

Its tricky when the two of you are not working together. Fwiw, I was exactly the same as your OH.. Flash Cars, Flash Clothes etc etc, But I was kidding myself. I have always looked after the money in our household, and used to tell the wife that all was good and not to panic... I think they call it head in the sand!!

Now, life couldnt be better, so you never know, your OH could see the light yet...

Hope all goes well for you

Regards

nikkikl

Yep, its so totally head in the sand. BUT, I have to hold my hands up and take some of the blame as I allowed it to happen. I must admit that I have a passion for the new shiny gadgets in the same way as he does and I think I allowed myself to be swept along with it all, against my better judgement - its all so easy to do with a credit card isn't it? But now I am kicking myself - I worked in a bank for years and quite frankly I should have known better but there we are, its done now and we have to dig ourselves out of it somehow. Walking around Sainbo's today was a case in point - there I am looking for all the 'Basics' labels whilst he was off down the sweet aisle with our son buying three Terry's Chocolate Oranges and delving thru the Pick n Mix !! I think I am banging my head against a brick wall sometimes!!

I did the Budget Spreadsheet this evening and I think that shocked him a bit so maybe, just maybe, I will get through to him if I keep on. LOL, fat chance!!

mountainofdebt

If hubby has a problem with credit cards instead of cutting the cards up I would cancel the cards.

Much more permenant and stops hubby (and you?) gettng a replacement when things get a little tight.

Malestrom

It IS a no-brainer - if the interest rate of the loan is lower than the rate at which you are being charged for your cards, then take the loan. It may take seven years to repay the loan but if you work it out, it will probably take twice as long to repay with the credit cards. Make sure you can overpay and repay in full at any time without being heavily penalised too. Then, when hubby sells the unnecessary sports car you can pay that into the loan.