Debt consolidation loan- talk me out of it?

[namechangedforthis27]

Just that really, it feels a bit scary. These are my pros and cons;

pros;
•reduces worry and mental load
• will be easier to manage rather than switching to 0% all the time
•will save £60/month
• there is an end date
• can repay early

cons;
• have done this once before and ended up with debt again (house move and unexpected car problems)
• feels scary
• probably costs more on paper, but I don’t know if it costs more overall when compared to interest paid across cards

context- I have credit cards, some of which are ending the 0% offer and doing all the switches feels very overwhelming. I have such anxiety and shame around money and don’t feel like I am very good with it, even though I have been getting better and adopting new habits.

I could carry on as I am, but I am finding it so stressful monitoring the different cards and I don’t feel like I am making good progress in paying it down so am feeling disheartened. Everything online warns against debt consolidation loans so I am a bit worried to do that.

plan at the min is to save for an emergency fund to prevent using debt again (got about £300 so far but have been prioritising debt payments) and continue sticking to my budget which is also working quite well.

Contact Christians against poverty and they will help if they have capacity.

Alternatively step change.

How much do you owe?

around £15k across 4 cards.

This might be the shame talking but I would feel bad taking away support from others. Other people are very vulnerable and I have just made some poor choices!

I don’t know anything about what you’re asking unfortunately but just wanted to say well done for making the changes that you have done and with your current mindset things can only get better. So hang on in there and don’t beat yourself up x

Try the Debt Free Wannabe section of Money Saving Expert.
Many contributors have been in the same boat so are very non judgey.

The issue with Debt consolidation as you have discovered is that it's a quick fix which usually ends up with new debt being incurred as the credit cards, once paid off are seen as money that's available to you.

The only way is to do the work and develop new habits .

There're some very long 0% balance transfers available at the minute. I would work out the transfer fees compared to interest on the loan and choose whichever is lower in the longer term.

Debt consolidation is generally not good value for money as it targets people who are desperate.

Would or could you consider an IVA? Bearing in mind the wider repercussions and impacts of this?

Please dont consider an IVA, the fees are astronomical for a small amount of debt

I would urge you to contact Step Change, although I read an article a few years ago that the Christian debt group was very helpful. Step Change do not judge at all. There is a lot of info on their website. I am now debt free. I used to use credit cards and just continued buying things .I don't do that now. It will really help you. I wish you a debt free future. I was so pleased to reach my final month and be debt free and having debt is stressful.

15k isn't really a small amount of debt, and consolidation loans don't tend to be cheap........OP needs to weigh up the cost of each option and decide which is best for her circumstances.

Sorry a tough love post from me

You’ve made poor choices before,consolidated and made more poor choices.
Dojng the same thing again would be utterly stupid

15k isn’t very much. With good management you’ll be able to pay that down. As others have said - a couple of long term 0% credit card switches . Please don’t get an IVA .

Taking out an IVA for 15K could cost 10K plus ruin her credit score for years.
It is highly restrictive and a last resort

Thank you for this. I am very motivated by being debt free. I’m doing all I can picking up extra shifts, de-cluttering and selling, budgeting. I know I can do it but it is bloody hard in the current climate.

It’s nice to hear from someone who has been through it!

Thank you so much for your replies.

this morning I was about to go through the loan application process but as I said felt scared by this. I took myself out into the garden to do some weeding and clear my head, came back inside and got on with some financial admin like updating my spreadsheet for the end of the month.

I think carrying on as I am is the best way for now, it’s just enticing to think of the loan being easier in the short term but I do know logically that this could be more costly in the long term. I know that I am a person who just cannot have a credit card in the future and actually cannot wait to close the accounts!

i am going to revisit this thread if i have another wobble.

The best thing I did was find a system and stick to it like my life depended on it. Have a look at You Need a Budget, Dave Ramseys baby step, Rebel Finance - it doesn’t matter really which system you use but building a framework around your money will really help. There’s a lot of stuff out there, lots of people struggle with money - there’s no shame in it but getting to grips with it through a regular system will make all the difference.

That's great news @namechangedforthis27

One of the things to do is to objectively and compassionately work out why/ what you have overspent on?
No judgement or blame, just facts

Its so so helpful and can get you working on those areas of your life