To take out a 1k consolidation loan?

[Cheesestring11]

I owe £565 for something I bought on a credit card, and I have been paying over the minimum but still getting charged interest, which has put the monthly payment up each month, last month it was £60.

I've been offered a loan from my bank for £1000 which i can pay off at £39 per month.
I also have a UC overpayment which is being paid back at £70 per month {£540 left) otherwise no debts.

Thinking that I could have a better deal if I take out the £1000 loan, pay off the 565 credit card in full, pay some of the UC and keep a bit for myself as a treat. It would make my monthly payments lower overall.
Would you go for this option?

Possibly but be wary as I think debt can be a bit of a slippery slope. Ie you just keep getting continually bigger consolidation loans to pay off x y z.

If you do this I think it’d be better to pay off all of the card and use the rest to pay off as much UC as you can rather than a treat.

Could you switch the CC debt to a new 0% interest card?
Do you pay interest on the UC debt?

Yes you are right I do need to be careful.. I meant just £50 or something to get my hair done but that's all

The credit card is an Argos credit card, I could have a look at switching it.

I don't pay interest on the UC repayment that I know of

I think you should borrow only as much as you need to to pay off your other loans and not take any as a ‘treat’.

Honestly I’ve been there and it just spiralled. I’m very very wary of being in debt now.

No treats. Borrow what you need for your debts and pay that off. Why make your debt worse for treats? That's just a slippery slope.

@Cheesestring11 - I would not take out any more debt in order to 'treat' yourself as it will cost you in the long run - the bank is not doing this as some charitable act, it wants to lull you into borrowing even more and make money off you. Much better to pay it off then use what you paid each month for treats in the future. Good luck.

Transfer it to a zero rate credit card if possible - you'll pay about 3-4% transfer fee (added to the balance) but you will get around 12-18 months to clear it off. Just remember to set up a standing payment every month for an amount which will make sure it's cleared before it becomes interest bearing.

Don't increase your debt. PP are right, it can become a slippery slope.

I might, but if the UC overpayment is interest fee, focus on paying off the other loan as a priority. If the bank is going to charge less interest than the cc, then borrow just enough to clear that (eg £600 rather than £1000) and pay it back as quickly as you can as a priority.
If the UC is interest fee, it's not going to increase the amount you owe anyway, so no real benefit putting yourself in more debt to clear it.

No transfer to a good 0% credit card

Your Argos card must have really terrible interest

Go on money saving expert and look at balance transfer cards

Do not get any more loans or increase your debt. Pay off what you have.

Or, as pp say, transfer to 0% cc. But don't use the card for anything else at all, at least until it's paid off.

Im in the spiral phase now of this. Ive currently got a £20k loan due to "consolidating and treating myself"

100% dont do it. Look at other forms of reducing it.
Round down your bank balance to the nearest £1 or £5 which ever is best for you. Do this everytime you look at your balance and start paying your card off with this. Its surprising how much it adds up.

Look around to transfer to a zero percent card if you have good enough credit.

Thanks for the advice, I'll take out enough to cover the Argos card and that's all

Definitely wouldn't do this. Right now you only owe £565 and you're making the repayments so it will be paid off before too long. You're talking about doubling that debt for no good reason and we all know how easy it is to justifying spending the money when it's sitting there, so your £50 treat would soon grow to include other things that suddenly seemed important or desirable and then you're in the hole for a grand.

As PP says, the lenders don't do this shit to help you out. Of course it's all rigged against you, according to the rules of human nature. Keep up with your repayments and build from there.

I could have a better deal if I take out the £1000 loan, pay off the 565 credit card in full, pay some of the UC and keep a bit for myself as a treat.

This just shows why you shouldn't. Consolidation loans have their place, but only for people who have gained sound financial sense after being in debt. Using a loan for a treat isn't remotely sensible.

If your Argos card is the 34.9% APR rate then def look at a 0% card transfer and pay it off that way

Years ago I got in a mess with my Barclaycard high interest account. I just couldn’t clear the balance with the interest they were charging

and keep a bit for myself as a treat

Absolutely not! If you’re in debt-doing this is a slippery slope.

I wouldn't personally. I did a similar thing a year or so ago and it ended up with other things like credit cards on top. Luckily I'm in a position to pay it all off now but it's a stressful time when it builds up