Massive debt: should I get a secured loan? Please help

[momoney1]

For various reasons I find myself in a lot of debt. This wouldn't be so bad if my income hasn't dropped by around £650 a month. Before this happened I had a plan to clear it fairly swiftly.

The debt is circa £30k. Long story but it's not all stupidity.

It is all currently on 0% credit cards, but a couple are coming to an end soon and I'm worried I will not be able to transfer them (my balance transfer offers have dried up).

Minimum payments are costing me around £500 a month. The £650 a month I had before went on the card with the 0% deal coming to an end soonest.

I budget well and can't cut back anymore.

Do I carry on like this?

Or do I get a secured loan? My mortgage adviser has found one company I could go with which would bring payments down to £350-400 a month. Over TWENTY FIVE years. Though he said after six years I should be able to remortgage and absorb the debt within my regular mortgage. There is of course a chunky fee to even get the loan.

Clearing everything at once and having one payment a month appeals. I can cut up my cards and not worry every single day. I can also overpay it if my income goes up.

However I am worried about the fact it's a "secured " loan. And that if I sell my house I have to pay the loan off in full. I don't really understand this part. Does that mean my equity covers it? Property prices are not rising where I am. What if I have zero pounds left after paying the debt for a deposit for my next home?

Any advice/experience appreciated, thank you.

What is the interest rate, and the fee?

How much equity do you think you have?

Consolidating debt is rarely the answer. Have you looked at how much interest you'll be charged over the term?

If it's secured on the house the mortgage company might have to be approached to ask for permission.

Contact StepChange

Interest rate would be around 10% and fee is around £2300 added to the loan. I don't know how much interest total it would be.

Thanks for the Stepchange tip

There was a poster recently who Googled Stepchange, ended up on a fake site with a very similar name & got conned. I know it sounds obvious but do make sure you’re in the right place!

Avoid secured loans if you can.
Second the advice to contact Stepchange.

Also watch out for anyone offering DMPs etc.

Am I missing something here? £350 x 12 x 25 is £105000!!!!! Are you mad?

Stepchange
Christians Against Poverty
Money Saving Expert forums
All will give you excellent advice. Rarely will they suggest a secured loan. It usually starts with a proper budget, checking for benefit entitlement and ways of earning money unless you need something more structured such as a DMP.

@fridaynightfuntime the plan would be to consolidate it with my mortgage as soon as possible, so to avoid that.

And I'm not mad, but I am feeling worried and a bit desperate. Trying to think through options before it does indeed send me mad

Thanks all.

I earn a good salary but live alone which is so expensive. Life has taken a turn recently which makes this all feel more scary and less manageable.

If you are managing the payments I’d carry on but try and keep them on 0% cards by transferring. Keep plugging away and you will clear it

I’m sorry I didn’t mean to be offensive I just couldn’t believe my eyes when I did the sums!! I totally understand why you want to do this as having just one monthly payment to think about and work with might feel much easier but if there’s any chance at all you could ‘relapse’ you’d be in huge trouble.

Do you post on MSE? They’re hugely helpful but something frustrating ‘sell your car’ ‘but I need it for school runs a few miles away and work is a half hour drive with no direct public transport’ ‘SELL THE CAR’

Haha! No I haven't been on MSE yet. Will have a look, thank you. Definitely not selling the car!

And yep I know it's all boggling. Crossing fingers for a lottery win

Get a lodger.

Don’t get a secured loan. Look at this:

www.mdmproofing.com/iym/debt-plans/mary-hunt-

It’s a good method. Also, check your credit rating - you can do this cheaply by signing up to Experian’s trial. www.experian.co.uk

If it’s good you will be able to access better and more 0% deals but even if it isn’t you probably will be able to move the debts. You don’t have to move all of it so if you have £10k on a card but can only find a balance transfer for £5k at least do that. Good luck.

Lodger!

As others have said, contact stepchange. I can't recommend them highly enough. But yes check the website is the genuine one, Google does throw up ones with similar names posing as them.

I arrange loans unsecured and secured but I think £2000 arrangement fee is normal but can be done cheaper and that Apr is much too, why not get an unsecured loan

@pandyandy I looked but am unlikely to get one - 40% chance with just one bank and that wasn't even for as much as I need. So sadly not an option

Don't go to step change you don't need to make yourself in a situation where you mess up your credit file

Ok which company did you look at?

Which website ?

Have you tried Sainsbury's loans and AA loans do a soft check on them 2 websites

pandyandy19, it sounds as if you're trying to talk momoney into paying you to sort out a loan for her.

AA lend upto 25k and I think Sainsbury's upto 40k