Consolidating debt?

[Quaintsunnyvillage]

Has anyone done this? I have about £8,000 worth of debt (I know, I’m stupid at the moment I am chucking quite a bit of money at it every month but because of interest on a part of it, it’s not going down as fast as I would like. I am going to struggle to maintain the amount I am currently paying every month long term, is there anyway of consolidating it do you know and coming to a sort of 24 month plan or something?

Speak to Stepchange. They will discuss your options and how to approach your creditors. If they are cc debts is the interest frozen ,have you stopped using them and adjusted your spending pattern to avoid further debt.

£5000 is a CC debt, the rest is a student overdraft. There is considerable interest on the CC I think but I am useless with money and don’t know how to go about getting it frozen etc.

Yes, I have adjusted my spending habits and am currently paying about £450 a month off debts, which is well more than the minimum payments but I am really going to struggle to maintain that long term, especially if I were to lose my job or something. I don’t want to commit to that amount indefinitely. I would, if possible like to have a proper look/evaluation of all my finances with someone impartial and see where I can freeze interest etc and come up with probably a 24 month repayment plan that is feasible for that duration, even if my current salary were to decrease. Does anyone know anyone that could help me do this, without trying to con me.

Yes Stepchange! They are government funded and will give you advice and template letters.

www.stepchange.org

I loathe consolidation loans.
For your credit card, set up a standing order to pay the minimum at your credit limit
(eg £10,000 limit, 5% minimum = £500)
every month
that way you'll clear the bill faster than you think
without having to remember to make payments

Go into your local bank and ask them for a loan. I'm sure it will be fine as long as your credit score is decent.

In future stay away from the credit cards. It's so easy to rack them up!

Consolidation loans are a great theory, however you have to get rid of all of the other forms of credit, otherwise it's all too easy to say "I'll just put that new purchase on the credit card" and all of a sudden you've got the same credit card balance as before but as well as that you're paying off the loan as well. Can be a dangerous cycle.

When does the overdraft expire? If you continue to pay £450 per month off the cc, you will see the balance drop faster and faster. I'd pay the minimum amount off the cheepest debt, and pile as much as possible off the other one.

Don't worry YET about what it's. If you have a currently secure job, you can carry on making the payments, no?

Both the OD and the CC are with the same bank/lender. Do you think it may be worth me going in to the lender and talking about whether they could do anything? The OD isn’t too bad as no interest and I pay £8 a month for the ‘privilege’ of having it. I am not paying anything on that off as my salary goes into it every month anyway and so I have just been concentrating on the CC, however, as of last year, the interest on my CC has shot up so it’s now about £100 a month just in interest. Do you think it’d be worth talking to the bank about seeing if they’d let me transfer it to a 0% card for the next year?

You must be paying about 24% APR to get £100 interest on a £5k credit card balance. Have you tried to get a 0% or low % card elsewhere to shift the balance to? That would be my first port of call assuming a good credit rating.

If you got a 0% for 2 years you would clear it at £200ish a month, and the other £250 you could throw at the overdraft which could be gone in 12 months.

Have a look at MoneySavingExpert; there are reviews/recommended 0% interest-free cards for which you can do a balance transfer & pay it off over a longer period of time.

I hate consolidation loans
Your debt will be unsecured?
Consolidation loans are usually secured so you will lose your house if you fail to repay
Much more risky