advice please re loans, credit card and overdraft

[mummag]

we have a 3,500 loan, 2,300 credit and an overdraft of about 1000. With all the talk of wages being cut (rumour at the moment i know), and tax credits and child benefit being reduced, do you think it would be worth while to take out a loan over a longer period to cover this and then just have one smaller payment per month. I do not think dps job is under threat but i do suspect we may have a bit of a pay cut. What do you think please?

I suggest going to a debt charity such as CAF or there is another one and going through your finances with them. They may be able to get all of those people to freeze the interest and let you may them off over a longer period of time.

Debts to pay off debts tend to be the start of a downward spiral.......

A loan to cover debt only works if you absolutely cancel your credit cards, overdraft etc. Otherwise you're far more likely to run those debts up again, but with the loan as well, and end up in more trouble. (and if wages are cut, you're more likely to have emergencies that you want to put on a credit card).

I would definitely talk to CAB or charities such as National Debtline. NEVER talk to someone who wants a fee for sorting your finances out. And the forums at Money Saving Expert are very very helpful.

Rather than taking out a loan to cover it all - very expensive for relatively small amounts these days - prioritise your debts instead.

Start with the debt with the biggest interest rate which is probably the credit card. Pay the minimum off the other debts and use every bit of spare cash to get the CC balance down to 0. Then work on the next most costly debt and do the same.

Good luck