Advice choosing debt consolidation

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Indebt

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Hi Folks,

I am new to this forum. Like most of you here, I am in financial struggle due to excessive debt, mainly from credit cards. I have over the years, cut down drastically on expenditure, but it is still not enough. I just paid off a €15,000 loan recently (what a relief!), but my debt is still mounting up...

Whilst I am managing at the moment (i.e., I have not had to miss a payment) as I still have a good full time job, I am wondering if there is any "accountant" minded person out there who can give me some advise on whether to choose the route to debt consolidation.

Basically my situation is this. I have a mortgage, multiple credit card debts and I live solely bank overdraft. So at the end of each month when I get paid, the bank balance is either "zero" or most often than not "in negative."

What would you do, keeping things going as such, or get a 2-4 short term loan to consolidation all credit debts + overdraft?

Here's the scenario:
Credit card 1
Balance: €3,000
APR: 9.12%

Credit card 2
Balance: €2,000
APR: 15.756%

Credit card 3
Balance: €2,500
APR: 14.004%

All based on purchases only. No cash withdrawal owed. I typically meet the minimum repayment each month + 20-30% extra on the minimum payment.

Bank overdraft:
Balance: -€3,500
APR: 12.45%

What would you do?

I could have gone to a financial advisor, but they charge a small fortunes, so I am trying to avoid spending more money than necessary. The last time I when to one, I was charged €550 for just looking for some advice on PAYE tax returns.

I know I am not as desperate as some poor people here who is about to loose their home. But, if I keep going this way, I would not be far behind them...

Thanks for your help.
 
Sorry to read about your situation.... I am in a similar position. I have a couple of observations:

1) On the positive side you've cut back your spending and that seems to be giving you some cash to pay off your loans. You've also managed to protect your credit rating, that's a real positive.
Have you figured out how long it would take to pay off your remaining debt at your current rate of progress?

2) If you continue to pay off the debt in the same manner as you have been doing, then you should only pay the minimum on the debt with the cheapest rates and pay the most on the most expensive debts.

3) Have you looked at credit cards which offer a zero % interest on balance transfers. There are not as many out there as there once was, but I found one recently with MBNA that offers 0% for ten months. I am going to use that to clear off about 7k worth of debt and will hopefully be able to clear it at the end of the interest free period.
Realistically, this is probably your best option.

4) Have you checked out getting a cheap personal loan? I tried this but found the rates offered by the banks were very expensive. Are you in a credit union? Maybe they could help you?

5) You should consider filling in the money makeover section, you will get plenty of good advice on how to best manage your current income?

Good luck with it...
 
The biggest problem with your query is that practically no bank is doing debt consolidation, certainly not if it means taking over other bank debt. In other words if for example your overdraft and credit cards are all with the same bank then there is a small hope they might consolidate them, if any of them are with different providers then they will not increase their own debt to clear another banks debt.

Best bet is the credit union if you deal with them, if not, maybe open an account and see how long before you can make an application.
 
I have done as you mention, taking CC and other loan, merging into one. I did not advise the bank that it was for debt consolidation, but other purposes and no further questions were asked. Paid off the loan in no time, compared to the CC and other debt.
If I was you I would seek a personal loan for the 11k, cut up the credit cards and have the overdraft facility removed entirely. Calculate your current payments for CC/OD and decide what you can pay on a loan and then what you can afford to save (for Christmas/holidays etc, times when you most likely ran up the debt).

Have the loan over an easy to manage period i.e. 4/5 years and start building up savings at the same time.

If you do not destroy the cards and reduce/remove OD, you are setting yourself up to do the same again in years to come.
 
I note you have not posted your income and expenditure so how do you expect proper advice.

If your bank will not consolidate (and this is not always a good idea) then you should cut up your credit cards, you say you're paying a bit extra, pay the minimum on card 1 and 3 and pay the max you can on card 2. When that is zero do the same to card 3 and then card 1.

Have you looked at your spending and asked yourself why did you get 3 credit cards, and what did you spend the money on, it's no good just sorting yourself out now if you don't learn from it. After you've tackled the credit cards you tackle the overdraft, gradually getting to grips with it and reducing the overdraft limit, and meanwhile you have to learn to budget.

Do you have anythink to sell to repay back debt? Could you get an extra job to try and tackle this debt?
 
As you are paying more than the minimum, you seem to be doing OK. Good advice from wbbs, stairs and bronte. If you are looking for a loan to clear the cards, but don't get rid of them you are asking for trouble. Have seen this so many times where people do this, and end up doubling their debts.

Bets advice where wbbs suggests the credit union, and they are very good to deal with. If you're not a member, you will have to show that you can pay money regularly to them - become a member, pay the minimum on your cards to allow you pay in to the CU to build up a history with them, may only take a few months, if you explain why you want the loan to them.
 
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