Best way to consolidate debt

[aroomofherown]

I need your help.

So. Due to a variety of things (2 months of unemployment, plus just thoughtless overspending before that), I owe about £10K on credit cards. i have now cut all 3 credit cards up.

£3K are on 0% cards although these are due to run out in 2 months.

£7K is on a high interest credit card.

My credit rating has dived to "Fair". What are my chances of getting a personal loan to consolidate these cards, or even another 0% transfer without smashing my CR even further? I've moved recently so am not on the electoral roll yet so that might have a part to play in that as well - I need to sort that out.

I have about £800 I can pay off.

What would you do?

When I had similar debt over 3 cards I tried to consolidate with a bank loan but they would only offer me 20% apr because really they didn't want to loan to me.

I later read on moneysaving expert that banks don't like you doing this as they think you will continue to accrue debt rather than use the surplus to pay off the debt.

So instead I started cutting my expenses down and paying off my cards that way.

20%?? Yikes. This is what I feared.

How long did it take you? I can't stand having this chain around my neck any longer but it feels like it will take forever. I've already moved to a cheaper rent, cut back on groceries, and most extras so I'm kind of unable to cut back any more.

There are some months I can pay £1400, others (like December) I can only pay £350. I also have a big trip to visit family next year which will cost aroud £2000 so I have to save for that - so £800 is a realistic figure for every month.

I will try and reduce the big, most expensive card first then.

I honestly can't remember, it's a long time ago now.

I know I paid off in chunks of £500-£1000 a month but at the time I didn't know about topcashback or Aldi so I could have done it quicker.

If you paid off £750 a month you'd be free in around 14 months. Plus dont forget the more you pay back the less interest you pay on the balance.

It's sensible to pay off the most expensive card first and to set up a fixed standing order to pay the others off or the dd gets a little bit less each month which drags out repayment in their favour.

I would make all min payments each months

Then pay all the highest intrest rate ones off in chunks and then move on as each one is paid off

Gah I'm hoping to be debt free by next NYE.

I have to be realistic and accept that it will take a full year. I'm not using topcashback though so I should look into that.

I have an Aldi nearby so I should really try shopping there although I do as much as I can at Lidl which is closer.

There are some good rates on personal loans at the moment, so it might be worth trying for one. It's generally best to start with your own bank as they are able to look directly at your ingoings and outgoings to work out if you can afford to repay, whereas other banks will have to go off your credit record, which by the sound of things is not brilliant.

Failing that, if you're really sure you can pay it off in a year, then maybe apply for some 0% transfer cards and use them for transfers only.

Definitely use topcashback, my car insurance this year for a new car, 15000 miles a year, fully comp with legal cover was £204. I got £84 cashback so £120 for a year.

Next year my free recovery from the dealership runs out so I get my aa/rac cover via them too for hopefully less than £40 for a years cover. I've got family member who auto renew with them who pay £300 a year .

You know £10k over 12 months is £833 a month, if you really tightened your belt I reckon you could do it.

Fluffy where on earth do you live?! I was quoted £2000 for a 4 year old car for 10,000 miles. I sold it instead.

Ooh the thought of being debt free in a year makes me want to dance like a slightly deranged woman. I've had this hanging over my head for years. You've inspired me. Going to see if my bank will offer me a personal loan to cancel out the cc as well, will save me a few hundred quid if I can get it.

My bank is advertising a personal loan at 5.75% interest, but I think due to my credit rating I would be offered a higher rate.

I think I'm going to wait for 2 months as that will give me time to join the electoral roll and ensure there are a full 3 months where I've not used the credit card, plus pay off £2000, so my rating should increase and I should be able to get a better interest rate on a personal loan. Also, my 0% cards start charging interest in 2 months so I'm only losing about £150 in interest (only? )

Midlands, I put dh on as a named driver but before I used to put my dad on because it lowered the premium

Ah clever! I like it

Hello. I wouldn't look for a consolidation loan as they charge you. Go and see a Community Debt Advisor. Look it up on the internet to find one near you. They are free and run as charities to help people in debt.

They will draw up what is called a financial plan. This will cover in detail all your incomings and outgoings (so you need to be prepared to be honest about it all, but don't worry as they are not there to judge you) and then they can work out what it is possible for you to afford. They write to all your creditors and make an offer (as low as £1 per month if that is all that is possible) and because credit agencies have to deal with Community Debt Advice as part of their agreement, you will find the creditors will accept the offer, subject to review of your financial position every 6 months.

It won't make the debt go away but it will make it manageable, stop you being harrassed by creditors and allow you to get on and live your life. I know because I am one of the voluntary debt advisors. We have seen countless people freed from the stress that debt brings.

Good luck with it all.