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  • FIRST POST
    • danrodgers
    • By danrodgers 30th Dec 16, 11:07 AM
    • 11Posts
    • 15Thanks
    danrodgers
    Bad credit loan to consolidate payday loans
    • #1
    • 30th Dec 16, 11:07 AM
    Bad credit loan to consolidate payday loans 30th Dec 16 at 11:07 AM
    Hi Folks,

    Over the last few months I've fallen into somewhat of a payday loan cycle, that I'm very concerned about getting out of. I earn ok money (20,000 a year), am full-time employed by a company which I've been with for about 2 years and 3 months, pay relatively low rent (about 500 a month) and don't have many outgoings besides, but I am ears deep in debt due to a series of bad decisions and I have a credit rating that's just slipped down to the upper echelons of 'very poor' on Equifax (score is 261).

    As it stands I have a 1000 overdraft which I use and owe 3500 on a 0% credit card (24 months). The overdraft and credit card aren't the burning issue, I can pay these off over time. The payday loans are, however, and I've been trying to see if there's any possible way I can consolidate them with a bad credit loan, which I can pay off over a longer period of time (ie. take out a loan to pay them off and get away from that super high interest and then make much more affordable monthly payments).

    I have 3 active Lending Stream Loans for 340, 100 & 100 and an active Wonga loan for 500. My next payday is at the end of this month and the payday loan payments will wipe out my disposable income and then some and continue to do so over the next 5 months or so.

    I went to Barclays yesterday and, as you can imagine, with the overdraft/credit card/very poor credit they were unable to offer me any sort of loan or overdraft extension and recommended I pursue other companies. I've since tried applying for different types of loans online, but consistently get rejected due to my credit rating. I've heard talk off approaching credit unions and peer-to-peer lenders, but I'm uncertain as to whether I would get anywhere with this route, with my credit rating in mind. I will not be able to get anyone to be a guarantor (my mother passed away last year and my father permanently turned his back on us when I was 12).

    I was just wondering if anyone has any advice? Is there any way to get a loan for 1000-1500 for 2-3 years with very poor credit and no guarantor, that I can afford to pay back over time (eg. 50-100 a month) or is it a no go unless I turn to loan sharks themselves?
Page 1
    • Sam29
    • By Sam29 30th Dec 16, 11:27 AM
    • 28 Posts
    • 22 Thanks
    Sam29
    • #2
    • 30th Dec 16, 11:27 AM
    • #2
    • 30th Dec 16, 11:27 AM
    I think you need to look at contacting the payday loans to advise that you are in financial dificulty arrange payment plans or freezing interest. Worst thing that will happen is your credit rating takes a hit but you said its low anyways and you should see that as a positive as last thing needed now is extra debt. You do not want to pay off debt with more debt because it will likely make things worse. Contact stepchange who will have excellent advice for you.
    • Ilona
    • By Ilona 30th Dec 16, 11:45 AM
    • 2,300 Posts
    • 8,087 Thanks
    Ilona
    • #3
    • 30th Dec 16, 11:45 AM
    • #3
    • 30th Dec 16, 11:45 AM
    Hi. I think you are clutching at straws if you want to borrow more money when you are already in debt. This forum is littered with people who want to consolidate, borrow more to pay debts, putting them into an even worse situation. It is also littered with stories of those who did go down that route only for them to be up to their eyeballs in debt because they didn't tackle the root cause of how they got there in the first place.

    I suggest you post a Statement of Affairs so the good people on here can make suggestions on how you might cut your spending, thus freeing up money to throw at your debts.
    http://www.stoozing.com/calculator/soa.php

    It is very unlikely that you will get a loan, and if you are refused that is a good sign, a wake up call to start budgeting. If you can see no way out I suggest you contact Stepchange for advice, it's free. Best of luck.
    Ilona
    I love skip diving.
    • Dobbibill
    • By Dobbibill 30th Dec 16, 11:50 AM
    • 3,827 Posts
    • 5,263 Thanks
    Dobbibill
    • #4
    • 30th Dec 16, 11:50 AM
    • #4
    • 30th Dec 16, 11:50 AM
    Hi Folks,

    Over the last few months I've fallen into somewhat of a payday loan cycle, that I'm very concerned about getting out of. I earn ok money (20,000 a year), am full-time employed by a company which I've been with for about 2 years and 3 months, pay relatively low rent (about 500 a month) and don't have many outgoings besides, but I am ears deep in debt due to a series of bad decisions
    Originally posted by danrodgers
    Where is the rest of your income going?

    ]and I have a credit rating that's just slipped down to the upper echelons of 'very poor' on Equifax (score is 261).
    Forget your score it's not the big thing you want it to be. Lenders don't see it. That is just how Equifax perceive you.......but then they don't arrange credit.

    As it stands I have a 1000 overdraft which I use and owe 3500 on a 0% credit card (24 months). The overdraft and credit card aren't the burning issue, I can pay these off over time. The payday loans are, however, and I've been trying to see if there's any possible way I can consolidate them with a bad credit loan, which I can pay off over a longer period of time (ie. take out a loan to pay them off and get away from that super high interest and then make much more affordable monthly payments).
    Forget consolidation, you are already in the rejection spiral. You are not going to get it.

    I have 3 active Lending Stream Loans for 340, 100 & 100 and an active Wonga loan for 500. My next payday is at the end of this month and the payday loan payments will wipe out my disposable income and then some and continue to do so over the next 5 months or so.
    Is this the monthly payments?
    How much do you owe to PDLs in total?

    You need to complete a SOA for tailored advice.

    I was just wondering if anyone has any advice? Is there any way to get a loan for 1000-1500 for 2-3 years with very poor credit and no guarantor, that I can afford to pay back over time (eg. 50-100 a month) or is it a no go unless I turn to loan sharks themselves?
    You cannot borrow your way out of debt.

    Firstly stop applying for loans.

    Then complete that SOA.

    Then contact the PDL companies and get the interest frozen.

    Address the reason you have the debt. (You don't want it to happen again)

    Either look at arranging a payment plan with them or come back for further advice.

    You probably won't agree with me just yet, but rejection has done you a favour. Now you can address the issue.

    ETA - cross posted with Ilona - pretty much, same advice
    Last edited by Dobbibill; 30-12-2016 at 11:56 AM.
    • sourcrates
    • By sourcrates 30th Dec 16, 1:03 PM
    • 19,154 Posts
    • 18,072 Thanks
    sourcrates
    • #5
    • 30th Dec 16, 1:03 PM
    • #5
    • 30th Dec 16, 1:03 PM
    Do not get a consolidation loan.

    You don't solve debt problems by further borrowing.

    Speak to your lenders, they will allow payment plans to clear the debts, you need to default on the payment before this can can happen though, cancel the debt card, and order a new one, if you just cancel the CPA you won't be able to use it to pay that lender again.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    forumteam@moneysavingexpert.com.
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
    • katy_ann
    • By katy_ann 30th Dec 16, 1:12 PM
    • 1,037 Posts
    • 5,621 Thanks
    katy_ann
    • #6
    • 30th Dec 16, 1:12 PM
    • #6
    • 30th Dec 16, 1:12 PM
    I can only echo what the others have said, consolidation loans are bad news, you need to address why you are in debt and contact the companies directly to arrange a payment plan.

    I found Stepchange to be very helpful in giving me advice along with more seasoned members of this forum

    Good luck on your debt free journey.
    Officially Debt Free on 10/12/2015 | Back hanging my head in shame
    DMP start date: 01/07/2019 | Total debt as of 23/06/2019: 3883
    • Fireflyaway
    • By Fireflyaway 30th Dec 16, 3:27 PM
    • 2,173 Posts
    • 2,563 Thanks
    Fireflyaway
    • #7
    • 30th Dec 16, 3:27 PM
    • #7
    • 30th Dec 16, 3:27 PM
    I was in the same position. I had 7 loans at one point. I decided to contact them all rather than get into more debt. A consolidation loan just puts you more in debt. It might be 1 payment rather than 3 or 4 but its just disguising the issue. Here is what i did if it helps to know. First I opened a new account to put my salary in so the loans didn't eat it up! Then get a coffee / wine / chocolate to hand! Next, call them and explain you have a financial crisis. Normally I am very truthful but in this case, lie about the reason if you have to! Offer to pay 1 a month to each ( from an account your wages are NOT in ). You may have to argue and might have to be creative if they ask your income and expenditure ( I wrote it down before calling). Then start tackling the smallest first once you know how much free cash you have.
    The downside is your credit rating might take a hit. In my case not all the loans showed up anyway and once they were settled I felt so happy. Suddenly my pay was mine and I felt in control again.
    Ensure you do a written budget so this doesn't happen again.good luck.
    • jaxsmar
    • By jaxsmar 30th Dec 16, 5:08 PM
    • 394 Posts
    • 1,586 Thanks
    jaxsmar
    • #8
    • 30th Dec 16, 5:08 PM
    • #8
    • 30th Dec 16, 5:08 PM
    Get all your paperwork to hand you need all the APRs look at your bank statements go onto the step change website use the online tools. New year new beginning.. Take control. Best of luck let us know the outcome.
    • On my way
    • By On my way 30th Dec 16, 8:57 PM
    • 325 Posts
    • 399 Thanks
    On my way
    • #9
    • 30th Dec 16, 8:57 PM
    • #9
    • 30th Dec 16, 8:57 PM
    You should phone the payday loan companies immediately. I promise they will be fine about it. The best way to start the conversation is: "I won't be able to make my next payment in full, I need a re-payment plan". Then they will either ask you what you can afford or want to go through your outgoings/other debt etc. Either way you need a bit of breathing space financially. You will be able to get all of this paid but you need a plan.

    Have you got anything that you can sell to help you pay these debts or just to put by in case of emergency?

    Ways to make some cash:

    * recycle any old mobiles you've got. Mazuma pay good money, especially for old smart phones. I recently got 80 for a 5 year old smart phone!
    * have you got any gold you could sell? I recently got 45 cash for a 9ct gold chain that I never used and wasn't sentimental


    Good luck, you can do this.
    • enthusiasticsaver
    • By enthusiasticsaver 31st Dec 16, 12:01 AM
    • 9,782 Posts
    • 22,972 Thanks
    enthusiasticsaver
    Consolidation loans aren't the solution.if you have relatively low outgoings then you should make minimum payments on credit cards and throw everything at the payday loans. These are usually the most expensive debts. Why did you take them out if you have an ok income and low outgoings? Do you know how the debt occurred? Borrowing more is definitely not the answer. You need to budget and work out where every every penny is going.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • sourcrates
    • By sourcrates 31st Dec 16, 11:28 AM
    • 19,154 Posts
    • 18,072 Thanks
    sourcrates
    More info here on solutions to the payday loan spiral, on the Debt Camel website :

    http://debtcamel.co.uk/help-payday-loan/

    Also consider if these loans where affordable to you, big re-claiming of interest going on at the moment :

    http://debtcamel.co.uk/payday-loan-refunds/
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    forumteam@moneysavingexpert.com.
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
    • Mark80
    • By Mark80 31st Dec 16, 12:04 PM
    • 14 Posts
    • 1 Thanks
    Mark80
    Hi Danrogers, I can tell you based on my experience, don't borrow more money to pay the debts. Stop this madness until it's not too late. I didn't do that and borrowed more and more to pay the debs until I couldn't pay anything.
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