We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Remortgaging to clear debt
Comments
-
sourcrates wrote: »The age old problem with consolidation loans is that the majority of people who obtain them, still continue their irrational financial behavior that caused them to get into debt in the first place.
Thus, a year, 18 months down the line, they have run up hugh credit card bills again, which they cannot service, because they have not changed there ways, and are not living within there means, and so the cycle continues.
Some even consolidate 2 maybe 3 times before they have there light-bulb moment, and see the folly of what they are doing.
So whilst on paper, consolidation can seem like a rational choice, you must live within your means, and make sure you cancel the existing, settled credit facilities, to have any chance of it working.
Well said. I would also add a couple more issues with consolidation - people are frequently encouraged to add a bit more to the consolidation loan over and above what they already owe, and also it tends to be taken over a far longer term compared to the time it would take to pay off the debt by cutting back on luxuries and making heavy overpayments, in interest rate order.🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25
Balance as at 31/08/25 = £ 95,450.00. Balance as at 31/12/25 = £ 91,100.00
SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0 -
The main danger with consolidation loans is more, in my opinion, not doing a realistic affordability plan beforehand.
It is all well and good reducing payments from, say, £1,000 per month down to £500, but if affordability is only £200 then you are goosed before you start. As you cannot mess with anything secured, it is inevitable that you will have to make the shortfall up somewhere. Like as not, that will be in the form of further credit.
The SOA is key here. A DMP may work, and certainly carries less risk, but you also look like you maybe a prime candidate for an IVA also. Get that SOA posted.0 -
Not trying to provoke an argument here; but, it seems that the 'go to' response is always don't consolidate, no matter what the circumstances. Yes it leads to longer term debt, and people may end up getting into the mess again, but for some people it may be the only option.
In my own situation, there's no other way out. It's my own doing, borrowing and wasting money etc., but I've done the SOA and had people look over it, but it leaves about £150 a month left to cover food bills and anything else unexpected - my remortgaging I can free up close to £1200 a month. I've had the above mentioned 'lightbulb moment' now, hopefully the OP can too.
I'd say try the SOA, see what people suggest, but do what's right for you and your own sanity.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.6K Banking & Borrowing
- 254.2K Reduce Debt & Boost Income
- 455.1K Spending & Discounts
- 246.7K Work, Benefits & Business
- 603.1K Mortgages, Homes & Bills
- 178.1K Life & Family
- 260.7K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards