Advice on CU loan to consolidate other borrowings

[jamestkirk]

Hi All,

I need some advice and I would really appreciate other posters offering some.

I was thinking of applying for a loan of my credit union (who are offering a good loan package to consolidate debt (overdrafts, credit cards) and clearing the whole lot in one go and have one outgoing payment. Would anyone agree that clearing all this in one would be the best option (depending of course if I got approved for this loan) or is there any other advice one could offer? Basically the overdraft every month causes me a great deal fo stress, it has built up over the years mainly due to unforeseen events like having do major work on getting cars fixed etc.

1. I have a 8,000 car loan (but we are looking to upgrade car to a 2015/16)
2. 2.8k Overdaft (that swallows up my income every month)
3. My wife has a small loan of 2k with the Credit Union
4. I also have a 6k CU loan.
5. No credit card.

 

[Michael Heary]

Consolidation can be dangerous if you don't address your overspending problem. People think they are out of the woods and end up accumulating new debt by spending on the cards/overdrafts that they have cleared. If you are absolutely certain that doesn't apply to you and you have the discipline to stop overspending then consolidation can be a good idea.

To me your debt looks like a lot of money and are you certain the credit union would loan you money when you already have loans with them?

 

[David1234]

Can you give the rates and duration for each of your loans and the proposed credit union rate?

It seems mad to me to be buying a 15/16 car with additional borrowings when you are living in your overdraft each month.

Look at filling out the money makeover template to give a better overview of your finances.

 

[Slim]

It seems mad to me to be buying a 15/16 car with additional borrowings when you are living in your overdraft each month.

This is what I would have posted here. Maybe consolidate the high interest debt and leave the car as it is until you get a rein on your outgoings each month.

 

[michaelm]

I would think a consolidation is not the answer as a quick fix is often no fix. All the amounts look bite-sized. If it was me I'd take a close look at my spending to see where saving could be made and do up a weekly/monthly/yearly budget. Unless it's giving trouble I would forget changing the car. I'd focus all efforts on eliminating the overdraft as quickly as possible before targeting the 2k CU loan and then the 6k CU loan (when amount outstanding is equal to shares held just pay it off). I'd then get a credit card with a small limit (say €1000) to cover emergencies and cancel the overdraft.