Debt consolidation loan - advice needed

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mrsalexkelly
mrsalexkelly Posts: 3 Newbie
in Loans
Hello,

I was just wondering if I could get some advice here :j

I have 4 credit cards with a total of around 10k on them.
The rates are 19.9% on 3 of them and 20.9% on the last one.
I decided to clear my balance as fast as I can, and I am considering a debt consolidation loan. I found one in Santander, they offered me 10k for 5 years, with a nice lower rate and one decent monthly payment.
My question is:
Is it worth to go through with it, or is it better to keep paying the credit cards?
Will it hurt my credit score if i switch?

Also, if I go through with it, should I keep my credit cards open, or just close them?

I am not behind with any payments, just wanted to know which is better option.

Any advice would be much appreciated,

Thank you
«13

Comments

  • Willing2Learn
    Willing2Learn Posts: 6,294 Forumite
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    edited 4 August 2018 at 7:19PM
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    Hello mrsalexkelly and welcome to the forum :)

    You owe a combined 10k. How much is your total credit limit combined?

    It would be far cheaper to get a 0% balance transfer card to reduce your monthly payments. 0% would beat what Santander offer on their consolidation loan.

    Also, don't worry about your score. It is meaningless. Lenders don't look at the score. They only look at the data in your credit report and the data you supply during an application process. They then score you independently of Experian or Equifax and in line with their own criteria and policies.

    Edit: I was just wondering whether you are paying more than the minimum payments on your cards or are you struggling?
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • mrsalexkelly
    mrsalexkelly Posts: 3 Newbie
    edited 4 August 2018 at 7:25PM
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    Thank you for your reply, much appreciated.

    I will browse 0% cards, together on all the cards my total limit is around 15k.
    I am just worried they won't accept me for another card :undecided , as I already got 4 of them...
  • Willing2Learn
    Willing2Learn Posts: 6,294 Forumite
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    Have you got any other debt or is it all on the cards?
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • mrsalexkelly
    mrsalexkelly Posts: 3 Newbie
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    I don't have any other debt, except these cards.
    I've never had a loan before, it would be my first time.
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,594 Ambassador
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    Debt consolidation loans are not recommended. Often people move their credit card debts on to the loan and then spend on the card again effectively doubling the debt. Have you addressed the reasons for the debt in the first place?
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • Willing2Learn
    Willing2Learn Posts: 6,294 Forumite
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    mrsalexkelly wrote: »
    I don't have any other debt, except these cards.
    I've never had a loan before, it would be my first time.

    Have a look at the MSE Credit Card Eligibility Calculator for Balance Transfer cards. It does a 'soft' search on your credit report so as not to negatively impact your file. You'll be able to see what cards you are most likely to get, without wasting an application and 'hard' search.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • DCFC79
    DCFC79 Posts: 40,598 Forumite
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    edited 10 August 2018 at 8:55PM
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    mrsalexkelly wrote: »
    Thank you for your reply, much appreciated.

    I will browse 0% cards, together on all the cards my total limit is around 15k.
    I am just worried they won't accept me for another card :undecided , as I already got 4 of them...

    Depending on your income a loan might not be workable, the apr might be high as you will be taking on extra debt.

    As mentioned a 0% credit card would be the best option.
    Would the debts occur again or just a 1 off ?

    Maybe have a read of this https://forums.moneysavingexpert.com/showthread.php?t=5567669
  • System
    System Posts: 178,094 Community Admin
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    enthusiasticsaver wrote: »
    Debt consolidation loans are not recommended. Often people move their credit card debts on to the loan and then spend on the card again effectively doubling the debt. Have you addressed the reasons for the debt in the first place?


    The best advice ever !:money:


    7 yrs ago we consolidated our debts then did the same thing two yrs later having not learnt our lesson the first time , last month was the last payment on loan 1 and in 15 days loan 2 is finished , its been a huge learning curve and an expensive one .
  • Sncjw
    Sncjw Posts: 3,509 Forumite
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    How much do you earn?

    Getting a loan will double the debt you have. The lenders will asses you on £20k debt for affordability. They don!!!8217;t know your going to use it clear a debt.

    I wouldn!!!8217;t keep the cards open as it would be temptation to spend on it. Also you might think they are clear I can go spend on them now but your still paying them off
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
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    mrsalexkelly wrote: »
    I found one in Santander, they offered me 10k for 5 years, with a nice lower rate and one decent monthly payment.
    My question is:
    Is it worth to go through with it, or is it better to keep paying the credit cards?
    Will it hurt my credit score if i switch?

    Also, if I go through with it, should I keep my credit cards open, or just close them?

    If they have actually offered you the loan thats less than 7% then take it, clear all your credit cards and cancel all of them. Dont take out any more credit until the loan is cleared.
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