New and needing a little advice

A question about : New and needing a little advice

Hello,

I've been on and around this site for a little while and really want to get on top of debt we have. Thought the best way to go about it is to join the forum as I find it useful to have motivation and from reading what I have read, it seems to be really positive and informative on this site.

So background info: we moved in just over a year ago and we needed the money to get the deposit and also some essentials. We also had some small existing debts.

Debts that we have on cards equate to approx. Ј7,500. Now, we have been good with moving debts around onto 0% cards etc, however some of these will be ending soon and we can't get another balance transfer card, however we can get a loan which would consolidate the cards. The interest rate of the loan is very low and the interest rates on the cards will be high (Sainsburys Loan).

The loan would be for two years which is when we are determined to be debt free. We are cutting back but it won't be enough for when the cards finish their 0% period.

Could I ask what your opinions are on how to deal with this situation. I've been against getting a loan but consolidating the cards would be great (also the interest on the loan for the two years is less than the interest from when the cards stop being 0%).

Many thanks

Best answers:

• Hi Bears2014,
  Well done for posting! You will get plenty of help here.
  Personally I am anti-consolidation as it is one of the reasons that led to me being 40K in debt! That said, you might be a lot more disciplined than I was!!
  I would take out consolidation loans, think everything was 'sorted' but then a few weeks later I would use the cards for my fuel telling myself " I'll clear it at pay day". Of course, that never happened.
  fast forward to 2014 and I owe 40K although I am now paying if off fairly quickly.
  I guess that as someone heavily in debt, I can't really offer you advice but personally I would tread carefully.
  Keep posting and I wish you well
• Is the loan secured or unsecured?
• Hi,
  Thank you for the replies.
  Yes I think I'm in the right mindset now than what I have been.
  I was paid yesterday and apart from the things we needed it to go towards (council tax/water etc) everything else got put into paying some of the debt off.
  I am a little reluctant as I've never taken a loan out but I like the idea of it all being together. Not having a loan before is a little scary as I wondered if I would be disiplined enough but I feel really confident as I am determined to get us debt free (apart from our mortgage) by two years.
  For the other question, it is a unsecured personal loan, I did a bit of research as I really didn't want anything against our home as it is our first home together and we've only been in a year.
• There is nothing worse about a loan than a credit card, both are debt. What is bad is ending up with both loan and credit cards. Chop up and cancel the cards immediately and don't keep them as a 'safety net'.
• I agree with Theoretica. If you are going to go for this loan then the cards must go. It's all too easy to pay them all off and then run them up again, leaving you with both loan and cards to pay. If you have some spare money try saving and putting it into an emergency fund to cover those unexpected costs so that you don't have to rely on credit.
• Thanks again for the replies.
  I took all the information from the cards we have and made a note of them as when I cancelled one card (once we cleared it) the company asked for all the information from the front and back.
  I have cut up the cards and I have made a plan of outgoings (basic food, some petrol - although I will be cycling more), basically things that would normally have gone onto a card. I'm lucky enough to be getting a little extra from work but this is just enough for the outgoings.
  As far as I can, I've planned a repayment plan if we did get the loan and it would mean that the debt is extended a little but we would be paying less a month which would help with other small outgoings.
  I feel a little more 'on the ball' lately with the idea of consolidating the debts and have been making a monthly plan of outgoings, plus with a small extra just for emergencies...although that would be getting paid off debts if we didn't use it. I think I'm just a little nervous of getting a loan but I'm not sure why.
• So bottom line I suppose is can you afford the loan repayments?
  Will you not use credit cards again?
  Do you know why you got into debt so you can avoid running up the debt again?