Should We Consolidate?

EmyrB

Hi all,

I was wondering what advice you the forum users and maybe Martin (if he reads the forums) can give on what to do.

We have a £60,000 mortgage on our house and we also have A £15,000 loan from the bank to renovate the house. We owe around £2,000 on credit cards and we are £1400 into our £2500 overdraft with the bank.

It is not the mortgae and loans that is killing us, its the coast of fuel both motor and energy. I work 40 miles away from where we live and my wife also works 20 miles away. Between us we are spending £100 a week on fuel just to get back and for to work. I have tried finding work locally but there is nothing in my line of work locally.

In order to survive the oncoming credit crunch, we decided to put our unfinished house on the market and move closer to where I work. But the whole family doesn't want to do this and it is starting to cause tension between the family. What I don't want to happen is to get too much into debt and end up loosig the house.

So my question is should we consider a loan of say £25,000 spread out over say 20-25 years to finish the house and get rid of the £15,000 loand and the credit cards or should we go to a debt counselling agency such as gregory pennington, or am I worrying about nothing.

Any advice would be great.

Cheers

EmyrB

Burlesque_Babe

Hi and welcome.

Please don't get a consolidation loan, you are paying interest on the interest you have already incurred. You will have many similar comments from people on this board who have been there (on more than one occasion for many), done that, got the t-shirt.

I would suggest using a free debt counselling charity such as the CCCS. Have a look at their website or give them a ring.

If you can put together your Statement of Affairs (SOA) then we can have a look at how to help you. How to do this is in the sticky at the top of the debt free wannabee board.

Please, please don't get a consolidation loan. There are other ways to solve the problem which will mean lots of budgeting and a probably completely new way of managing your finances, but in the long run is a 1000% better than saddling yourself with more debt over a longer period.

Cleosmum

As Keren says do not get a consolidation loan, and if you need to use someone to help with your debt management then use someone like CCCS. Definately post up your SOA and we can see if we can spot any areas that you can save on.

davetrousers

Talking to cccs would be a good idea

payingfornowt

I cant think of a situation where consolidation is the best option.

EmyrB

Thanks for the quick response guys. What do you mean by the SOA, is that the budget planner spreadsheet?

I don't really want to go down the consolidation loan route if I can help it, but I don't want to sell our house either. We don't go out much, if at all, all our money seems to be going on petrol and general living costs. I will check out the CCCS web site, but if we do go down that route, will that mean my credit rating goes out the door. I had a work mate who was using Gregory Pennington to help sort out his debts and it took him a good 10 years to be able to get a credit card and a contract mobile phone.

Cleosmum

Why pay Gregory Pennington a fee when CCCS will do it for free

Q. How much do I pay? A. At Gregory Pennington, we are committed to being completely clear and open about the charges for our services. Your first monthly payment is an initial fee for setting up our Payment Programme and is not paid to your creditors. This will place your accounts into arrears or further into arrears. There’s a monthly fee of 15% included as part of your affordable monthly payment (subject to a minimum of £25.00 and a maximum of £100.00).

EmyrB

No idea why he chose Gregory Pennington, I just used him as an example.

I am filling in the Debt Remedy stuff now on the CCCS's website as we speak (metaphorically). Is the SOA the budget planner spreadsheet?

Burlesque_Babe

Have a look here for the SOA

http://forums.moneysavingexpert.com/showthread.html?t=107280

and here for a general introduction to the DFW board

http://forums.moneysavingexpert.com/showthread.html?t=562271

Please don't use Gregory Pennington. Have a look at the CCCS website, they are really excellent people. I never used them so can't comment personally but there are so many people on the DFW board who can give them the thumbs up.

Clariman

EmyrB wrote: »

Thanks for the quick response guys. What do you mean by the SOA, is that the budget planner spreadsheet?

You can use that but the one referred to here allows you to copy and paste it directly into a post all formatted properly... and allows you to save it for later use.

Clariman

ltm07

As the others have said,please don't consolidate. OH & I nearly did a few weeks ago as we were getting so frustrated with our debts. We're glad we didn't Would have consolidated £32k over 16 years & the interest alone would have been £22k! We have found a few ways to save cash from the tips from Martin & the good people on here. It is tough but ride the storm,it will be worth it in the long run. We now do our regular shop at Aldi which is saving us around £100 a month,we have cancelled Sky saving a further £37 a month,rarely buy newspapers,instead read them online or pick up the free Metro paper & only use the car for neccesary journeys. Your SOA is all your income & expenditure,debts & interest rates. It is also worth putting all your debts & APR's onto www.whatsthecost.com calculator,to work out which debts you need to tackle first. Good luck.