Debt Consolidation

neil101

Hey everyone,

A bit of advice please... I have been offered two debt consolidation loans... and the pure purpose of these is the make the payments of my debts managable. I have no intention of racking up credit cards again, I really have learned my lesson, and had all the sad and lonely nights in the house at the age of 26. I just want to get my finances back on track, be able to get some money together (i.e. not be up to my overdraft every month), and the finally pay the things off....

I have been offered the following:

Ideally I need about £15k but there are two options i am toying with.

WH Loans (from best4loans.co.uk) - £10,000 over 10 years - consolidate the majority, and then priority pay the rest of the debts off.... £137 a month.

Yes Loans - £17,000 will clear everything in one go, pay £242 a month, and has the option to make aditional payments when i get bonus at work and stuff like that.....

Can I have any constructive thoughts / experiences. I know youw ill have heard people say this before, but I really have no intention of racking up any more debt at all, I will cancel all my credit cards, (they are already cut up).

Also has anyone got any experiences of asking credit comanies for Full and Final settlement offers? i.e. can i get the debts reduced this way?

Thanks People

N

jenevieve

Hi Neil,

I think if you are truly seriously committed to not building up more debt then consolidation may be a consideration.
However, it is essential that you look at how and why you got into the debt in the first place. If you can examine the reasons/circumstances behind it and resolve any problems that could lead you down the same path again then that will be really helpful for you in the future.

Like many on this board, I have consolidated twice and am now in a right pickle! So I would urge you to consider this with absolute caution.

I got a full and final settlement on a loan that gave me a reduced figure due to the interest I wouldn't be paying being taken off.

All the best, whatever you decide.

Bismarck

Hi Neil,

well done for posting...I'm not going to get into the "don't consolidate, you'll spend again" debate as you know what you're trying to do....I just hate the inflexibility of them if circumstances change and they do for so many people!

Before you go ahead, look at the interest you'll be paying these companies over the periods...is there no cheaper way of doing this...a 10 year loan with probably front-loaded interest could mean that if you wanted to rejig things in 3 years time (trust me, you might want to!) you may not have actually paid off any capital! All you'll have paid is interest.

Please do the maths or tell us the APRs and some clever folks on here will point out how much you could be paying on interest.

poorandindenial

What are the details of your current debts and what are the details of the loans you are being offered.

On the whole consolidation = bad

Be suspicious whenever a bank OFFERS you anything. But post up the details so we know what we are dealing with. (By that I mean company, debt balance, monthly repayment, APR etc)

You can also put your old and new situation into the snowball calculator to see what the world is like for each scenario (https://www.whatsthecost.com)

Finally what sort of state are your accounts in, do you always pay the minimum or have you missed payments?

neil101

I truly am committed, the debts were built up when i was a student. and im not a student anymore. I used to do stupid things like go on a night out and pay it all on never never etc.

Now i have grown up, and realise that paying out £500 a month to minimum repayments is not the way forward, and im never going to be debt free. I get bonuses at work, sometimes up to £1000 a month, sometimes none, but when i get a bonus it means i can live normally and when i dont i live like a poor person... if i consolidate i can make aditional payments, and then still have a life if that makes sense...

Also a loan over this period is likely to repair my credit rating if i pay it all the time?

neil101

and yes i have missed payments etc. cos im stupid

poorandindenial

Have you checked out the snowball thingy on whatsthecost.com???

Paying a loan over that period should make your credit rating look healthier by the end of it, but so would a sustained period of repaying your existing debt and killing off any credit that you aren't using will help too. Consolidation can be the right route for some (but not most) but we do need the full details of your situation to come up with the best suggestions for you.

neil101

OK - I will post my details of debts etc at the weekend, by this time i will have all the details of the loans through etc, and will be able to post them too.... is that any good?

poorandindenial

neil101 wrote: »

and yes i have missed payments etc. cos im stupid

Not stupid - it is just stuff that happens. The reason I was asking was because if you have a healthy account it would be unlikely that the bank would take a full and final - although these can be fraught wit pitfalls and may also adversely affect your credit rating depending on what info your bank passes to the credit reference agency.

10past6

jenevieve wrote: »

I would urge you to consider this with absolute caution.

poorandindenial wrote: »

On the whole consolidation = bad

Totally agree with both posts.

poorandindenial

neil101 wrote: »

OK - I will post my details of debts etc at the weekend, by this time i will have all the details of the loans through etc, and will be able to post them too.... is that any good?

Excellent.

Have you looked at everything else that you have going iut to see if you can use your money smarter?? If you do an SOA (see post at top of board - it says feedback on SOA calculator but if you go through the links you get to the tool itself) and post it on here it is amazing the savings that people can help you to find.