Consolidation Loan Help Please

In_a_mess_6 · 3 July 2004 at 9:23PM

Hello everyone Im new here ;D
Can I start off by saying what an amzing website this is! Thank you to Matin for setting it up and giving everyone so much invaluable info for free!!
Anyway, to me, well im in a bit of a mess financially - okay a lot of a mess. I assume you want details without my giving too much unecessary info so I'll give it a shot and if you need more info to advise me then just let me know.

My first thing to do is to apply for a personal consolidation loan and from reading all the excellent articles on here I have come up with Northern Rock for the loan and Freeinsurance for the PPI.

To give you some history I am paying of
1) 1xoverdraft (whilst agreed it just keeps growing and growing every month)
2) 2xhome improvement/furniture loans
3) 2xcredit cards, mine and hubbys (whilst both currently at 0% I am weary of the skipping about looking for new offers every 6 months)
4) 1xinterest free furniture repayments (whilst its 0% I just cant cope each month and am spending more than I earn therefore the overdraft keeps increasing every month)
5) 3xinsurance renewals that i usually pay monthly spread over the year for same reasons as stated in point 4.
6) a car loan

I need a loan for 25,000 to clear everything. I would like to repay over 10 years as I am trying to lower my monthly expenses.
I am married, homeowner, 35 years old with a good credit record (I think!)
Northern Rock is offering it at 6% repaying £276.05 per month (can you beleive to include PPI it jumps to £409.96!) and freeinsurance is offering the PPI at 17.36 per month (saving a whopping 116.55 per month x 120 = £13,986 - STAGGERING!)
So thats a total monthly repay of £293.41
I unfortunately cant apply for the excellent cahoot loan as their max is 20k

So does it sound as if Northern Rock and Freeinsurance would be the best way to proceed.

Once I have sorted this I am going to look at a new mortgage (currently 115k with standard life)

And I am completing Martins excellent Money Diet Spreadsheet and can already see where we are going wrong! We have enough to cover our expenses but when holidays/birthdays/xmas and our recent wedding came along everything goes to pot!

I also need to look at pensions and life insurance and my will but think the consolidation loan is the best place to start so thats number one.

Thank you for any help or advise you can ofer it is much appreciated. Or even if its just to say yes Northern Rock loks like best choice that would be nice too because this is all a bit new to me.

Thanks again ;D

[Deleted User] · 4 July 2004 at 12:55AM

Have a look at

http://www.moneysavingexpert.com/cgi-bin/yabb/YaBB.cgi?board=Debt;action=display;num=1086846898

Hopefully this will help.

System · 5 July 2004 at 12:47PM

HI

Thanks for that link it is a great post.
I have read and understand what you are saying and have taken in all on board. I fully appreciate we have to work hard over the coming months in bringing our spending in line with our earnings and am currently planning and budgetting to acheive this.

I suppose my question really was is Northern Rock the best way to proceed (addition to mortgage not really an option) or does anyone know of a cheaper loan that would be worth looking at?

many thanks

DiggingOut · 5 July 2004 at 4:43PM

It isn't going to be easy to get out of this much debt, and you can't afford to get weary of skipping around on 0% cards -- it is saving you money.

Northern Rock may not offer you 6% interest, with your level of debt they may not credit score you very well, and charge you a much higher rate. But even at that lower rate, 0% is better than 6%!

Other debts may be good to consolidate, but not your 0%. That is just giving money away -- don't do it!

You also have to look at prepayment penalties/rule of 78 stuff on your loans. Sometimes it will cost you so much to pay off a loan that it is a bad move to do so.

The real problem is not the debt. The real problem is this:

I just cant cope each month and am spending more than I earn

There are two possible solutions:
1. Earn more (additional part time job, evenings/weekends) -- not possible for many people.
2. Spend less. What exactly are you spending money on? Go through and track all your outgoings, and decide which of them you really can live without for a time until you get the debt under control.

Think radical. Only drink water for a month and see how much you save. How often do you go out? 2/3 of those times, stay in and play a game or read a book. How much will you save?

Do you smoke? Cut it in half (or stop entirely, that's even better).

Do you buy lunch at work? Take a lunch with you instead.

Everything you spend ANYTHING, think, "Could I have done this cheaper?" Or better yet, could I have done without entirely?

Next time you are going to go out, stay home and read this site. Old-fashioned money saving board, etc. Little savings can add up to a lot.

It's not forever, it is only until the debt is under control. If you add no more debt, in time these loans will go away, and you will have so much more freedom. Debt can be enslaving, but you can beat it.

Consolidation Loan Help Please

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