Remortgaging to clear debt

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.

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.