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  • FIRST POST
    • mrsalexkelly
    • By mrsalexkelly 4th Aug 18, 7:08 PM
    • 3Posts
    • 0Thanks
    mrsalexkelly
    Debt consolidation loan - advice needed
    • #1
    • 4th Aug 18, 7:08 PM
    Debt consolidation loan - advice needed 4th Aug 18 at 7:08 PM
    Hello,

    I was just wondering if I could get some advice here

    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
Page 1
    • Willing2Learn
    • By Willing2Learn 4th Aug 18, 7:17 PM
    • 1,585 Posts
    • 1,207 Thanks
    Willing2Learn
    • #2
    • 4th Aug 18, 7:17 PM
    • #2
    • 4th Aug 18, 7:17 PM
    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?
    Last edited by Willing2Learn; 04-08-2018 at 7:19 PM.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • mrsalexkelly
    • By mrsalexkelly 4th Aug 18, 7:23 PM
    • 3 Posts
    • 0 Thanks
    mrsalexkelly
    • #3
    • 4th Aug 18, 7:23 PM
    • #3
    • 4th Aug 18, 7:23 PM
    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 , as I already got 4 of them...
    Last edited by mrsalexkelly; 04-08-2018 at 7:25 PM. Reason: Edit: I am always paying more, as I want to clear the debt as fast as I can
    • Willing2Learn
    • By Willing2Learn 4th Aug 18, 7:31 PM
    • 1,585 Posts
    • 1,207 Thanks
    Willing2Learn
    • #4
    • 4th Aug 18, 7:31 PM
    • #4
    • 4th Aug 18, 7:31 PM
    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

    • mrsalexkelly
    • By mrsalexkelly 4th Aug 18, 7:33 PM
    • 3 Posts
    • 0 Thanks
    mrsalexkelly
    • #5
    • 4th Aug 18, 7:33 PM
    • #5
    • 4th Aug 18, 7:33 PM
    I don't have any other debt, except these cards.
    I've never had a loan before, it would be my first time.
    • enthusiasticsaver
    • By enthusiasticsaver 4th Aug 18, 7:37 PM
    • 7,182 Posts
    • 15,609 Thanks
    enthusiasticsaver
    • #6
    • 4th Aug 18, 7:37 PM
    • #6
    • 4th Aug 18, 7:37 PM
    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?
    Debt free and mortgage free and early retiree. Living the dream

    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
    • Willing2Learn
    • By Willing2Learn 4th Aug 18, 7:43 PM
    • 1,585 Posts
    • 1,207 Thanks
    Willing2Learn
    • #7
    • 4th Aug 18, 7:43 PM
    • #7
    • 4th Aug 18, 7:43 PM
    I don't have any other debt, except these cards.
    I've never had a loan before, it would be my first time.
    Originally posted by mrsalexkelly
    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

    • DCFC79
    • By DCFC79 4th Aug 18, 8:01 PM
    • 32,740 Posts
    • 20,607 Thanks
    DCFC79
    • #8
    • 4th Aug 18, 8:01 PM
    • #8
    • 4th Aug 18, 8:01 PM
    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 , as I already got 4 of them...
    Originally posted by mrsalexkelly
    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
    Last edited by DCFC79; 10-08-2018 at 8:55 PM.
    • CHRISSYG
    • By CHRISSYG 10th Aug 18, 11:05 AM
    • 5,757 Posts
    • 16,602 Thanks
    CHRISSYG
    • #9
    • 10th Aug 18, 11:05 AM
    • #9
    • 10th Aug 18, 11:05 AM
    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?
    Originally posted by enthusiasticsaver

    The best advice ever !


    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 .
    Be careful who you entrust with the care of you vulnerable loved ones thereís a lot of bottom feeding scum posing as normal human beings !
    • Sncjw
    • By Sncjw 10th Aug 18, 12:16 PM
    • 1,933 Posts
    • 1,143 Thanks
    Sncjw
    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
    • foxy-stoat
    • By foxy-stoat 10th Aug 18, 2:21 PM
    • 2,796 Posts
    • 1,584 Thanks
    foxy-stoat
    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?
    Originally posted by mrsalexkelly
    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.
    • Clive Woody
    • By Clive Woody 10th Aug 18, 2:36 PM
    • 4,527 Posts
    • 5,110 Thanks
    Clive Woody
    Key question: - Have you looked into how/why you ran up £10,000 of debts and worked out how you will avoid doing this again in the future?

    Some good advice already given on how to handle the debt but the big challenge is not finding yourself in the position again.
    Rugby Union - The Greatest Game
    • Herzlos
    • By Herzlos 10th Aug 18, 2:55 PM
    • 8,085 Posts
    • 7,404 Thanks
    Herzlos
    Get the loan, clear the cards and cancel them. Pay the loan off and be more careful with money


    I wish I'd done that years ago...
    • enthusiasticsaver
    • By enthusiasticsaver 11th Aug 18, 3:03 PM
    • 7,182 Posts
    • 15,609 Thanks
    enthusiasticsaver
    The best way to clear the debts is to budget, budget and budget. Move them gradually to 0% cards to help with the paying off of them and pay as much as you can afford to get them cleared. Debt consolidation loans only delay paying off debt and if you already have £10k of debt and apply for a £10k loan you will be assessed on having £20k of debt as there is no guarantee you will use the loan to pay off the cards. That may mean the rate is not very good.
    Debt free and mortgage free and early retiree. Living the dream

    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
    • aidrenegade
    • By aidrenegade 23rd Aug 18, 10:56 AM
    • 27 Posts
    • 6 Thanks
    aidrenegade
    Zero % transfers are not free, Think I was charged 5% or something of balance transferred. Still cheaper than months of interest though.

    I'm just revisiting mse after a while because despite getting debt free in about 2012 and staying debt free for 3 years I'm now in a position where a 3 year dribble of problems has got me back into about 9k debt. Last 2.3k was a new car for work in May on a credit card as I couldn't get a loan as I don't own my own home. Old one failed mot ant not worth expense of fixing. It is a taxable expense but not till after next April. The rest was living on a card while going through sporadic periods of lack of work (self employed).

    Currently have about 4k on 0% good for another 11 months the rest is at 17.9% Lack of work is not for long enough to try signing on. Just delays in starting work with nothing to fill the gap. Another week off again this week due to a delay in being able to start.
    Aid Renegade
    • Willing2Learn
    • By Willing2Learn 23rd Aug 18, 11:04 AM
    • 1,585 Posts
    • 1,207 Thanks
    Willing2Learn
    Zero % transfers are not free, Think I was charged 5% or something of balance transferred.
    Originally posted by aidrenegade
    That is not correct. Some promotions offer both 0% on the balance transfer and 0% on the balance transfer fee.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • aidrenegade
    • By aidrenegade 23rd Aug 18, 11:12 AM
    • 27 Posts
    • 6 Thanks
    aidrenegade
    Thanks, didn't know that, I'll start looking for one! Any pointers would be helpful!

    Also think I was charge 3.5% not 5%. Started my search on MSE
    Last edited by aidrenegade; 23-08-2018 at 11:18 AM.
    Aid Renegade
    • Willing2Learn
    • By Willing2Learn 23rd Aug 18, 11:18 AM
    • 1,585 Posts
    • 1,207 Thanks
    Willing2Learn
    Thanks, didn't know that, I'll start looking for one! Any pointers would be helpful!
    Originally posted by aidrenegade
    There is currently seven listed in the article below. But the number changes from time to time. Tesco definitely do one too (they are not on the list for some reason)

    https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/#nofees
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • aidrenegade
    • By aidrenegade 23rd Aug 18, 12:11 PM
    • 27 Posts
    • 6 Thanks
    aidrenegade
    As debt is on a Tescos card tried them first but basically cc companies don't transfer debts 'in house'. Was given the option of 3.7% over 24 months as a consolidation loan though.


    Time to look at the other cards available.
    Aid Renegade
    • aidrenegade
    • By aidrenegade 23rd Aug 18, 12:51 PM
    • 27 Posts
    • 6 Thanks
    aidrenegade
    Used mse eligibility checker to see what I might be accepted for. Went for the Lloyds option. I'm not good enough for 0% transfer fee, paid 3% got 18 months at 0%
    Possible tip / something I didn't do. Lloyds would only accept up to 95% of my agreed limit for a balance transfer. Suggest you multiply the amount you want to move to 0% by at least 1.1 and use that as a guide for the credit limit to ask for.

    Should still have saved about $450 annually on current debt. Now time to secure more work to pay it off.
    Aid Renegade
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