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.

Surely if you have say over 50k in equity a remortgage would be cheaper than a loan, how much is your property worth and how much do you owe on the mortgage?

I have just let them know the loan website to go on they don't need me to arrange a loan can do it themselves pretty easily it's the same as any financial application, I'm just trying to help out I don't know how they had a quote for a secured loan of 30k over 25 years at £350 a month figures don't add up seems a con to me

I've done the soft search thing and it's a no go on a personal loan.

My mortgage adviser has looked into my equity/remortgaging and that's also a no go.

My one option is the secured loan. Or stick with cards

@Empresslebianinchair do you have any constructive advice to save them money?

pandy, the OP needs advice, not you selling her a loan!

Please contact one of the charities already mentioned momoney1. They'll advise what is best for you.

www.moneysavingexpert.com/loans/debt-help-plan/?_ga=2.202480659.367347609.1573314494-182188852.1525688748#help

Ok so you need to find a secured loan company that will lend to you directly with no broker fee

Do not get a loan secured on your house. I would advise Payplan or Step Change as others have said. They can advise you about options open to you. I don’t think not messing up your credit file is realistic anymore given the amount of debt.

How am I selling her a loan, you are trying to get her to go to debt advice which will probably make her do a IVA which which also make her credit rubbish and also then they charge management fees which is a con, I am giving her website to go on herself and check how am I gaining anything from that?

Listen to who you want but to mess up your credit file is a bad idea, you just have to find a way to manage your debt and make a decision that you will be able to afford the monthly payment, if you can't do anything to make it manageable for yourself then last resort will be a debt charity who will probably arrange an IVA

For OP or anyone else struggling with debt, please do contact one of the charities linked to. Do so as soon as you feel you're not coping, it's far better to ask for help then than when things are out of control. They're not going to force you to do anything, and any advice offered will be in your best interest.

Also by the way everyone Mumsnet is here for everyone to give free advice, no one is here to make any money just to make it clear, I guess my thinking on a bad credit file is different to other people's. We all have our own opinion.

How much debt do you have on each card and when do they run out of the 0%? What will the rate be once the 0% runs out.

10% is a really high rate.

I know the credit card rate will be higher but you would probably be better (for example) to pay a quarter of your debt at 25% (on the run out card) and three quarters at 0% than pay all of it at 10%. (Especially if you have to pay £2k for the privilege.)

Do not secure a loan on your home.
Speak to a reputable debt company, they can have the interest frozen and organise a manageable amount for payments that will go directly off the money owed.
You'll lose your home. Is the risk of it even worth it..
As long as your not in debt with your mortgage you have security.

Is there a way you can increase your income? Second job? Taking in a lodger? I’d be looking into doing something like that and chucking everything at the debt before screwing up my credit rating by doing an IVA or similar.

2nd job or lodger is a good idea.
The IVA actually helped people with bad credit getting themselves into more debt by giving them a bad record.
I used in years ago, I eventually paid back all the money, I haven't applied for a credit card since though I got a bank loan with no issues since based on my bank usage I only use a debit card now.
If I don't own it I can't spend it.

Look at every single way of increasing your income, reducing your outgoings and selling items you don't need before you tie yourself into massively increasing your debt.

I would contact Christians against poverty or Stepchange as suggested already to see what help they can offer, you don't need to do anything that you don't feel comfortable with.

Use the Moneysavingexpert website to see if you are eligible for any 0% Credit Cards to move any money over before your current 0% deal ends.

Think as the secured loan as your very last resort.

Thank you all. Considering various options to increase my income. Wish me luck!