consolidating debt

Scarecrow 2

Hi folks
I have a personal loan, credit card and Overdraft and have found it tough the last 3 months in keeping in top of payments.

Is it possible to put the credit card and overdraft into the loan and only have one debt? And if so would this effect my credit rating.

I read somewhere that this would be bad for 5 years if I consolidated the debts into 1.

Q&A

Unlikely that you can merge them into an existing loan but depending on your circumstances a new consolidating loan might be doable. But check the t&C's on the debts first.

Are all the loans with the same provider? If so I would engage with them as soon as you can. Don't be afraid of exploring another provider. Overdrafts and cc rates of interest are high but how sustainable would a consolidated loan be in your current position?

As for impact on your credit worthiness having one loan you can repay versus three you can't is a much better situation to be in.

Scarecrow 2

Q&A wrote: »

Unlikely that you can merge them into an existing loan but depending on your circumstances a new consolidating loan might be doable. But check the t&C's on the debts first.

Are all the loans with the same provider? If so I would engage with them as soon as you can. Don't be afraid of exploring another provider. Overdrafts and cc rates of interest are high but how sustainable would a consolidated loan be in your current position?

As for impact on your credit worthiness having one loan you can repay versus three you can't is a much better situation to be in.

Thanks for your reply.
Yes they are all with the same bank. I’m just wondering what is the best option for me to try and sort out my debts as I am struggling repaying in last 3 months and it’s getting on top of me.

Q&A

Scarecrow 2 wrote: »

Thanks for your reply.
Yes they are all with the same bank. I’m just wondering what is the best option for me to try and sort out my debts as I am struggling repaying in last 3 months and it’s getting on top of me.

I don't see any harm talking to your current provider. They don't want you defaulting either. They have access to a lot of your financial data so will be coming at this informed which is a good thing. See what they say. That's your starting point.

From there you night want to look around. If you can find better elsewhere great.

HeidiHeidi

Scarecrow 2 wrote: »

Hi folks
I have a personal loan, credit card and Overdraft and have found it tough the last 3 months in keeping in top of payments.

Is it possible to put the credit card and overdraft into the loan and only have one debt? And if so would this effect my credit rating.

I read somewhere that this would be bad for 5 years if I consolidated the debts into 1.

The credit card and overdraft interest will be huge in comparison to a personal loan, so if you have any decent negative balances on those you absolutely should look at consolidating.


Have you tried a credit union? Their interest rates usually aren't rock-bottom afaik, but they have to be better than a commercial bank. However I suspect you'd need to be a member with some sort of savings record, so that may not be possible.


Definitely approach your own bank and see if you can get all balances put onto the personal loan, the interest savings would be big.


I have no idea why consolidating debt would affect your credit rating?

atilladehun

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beauf

They say the problem with consolidating debts is that it doesn't force you to address the issues that caused you to get into debt in the first place. That most people who do it end up right back in debt again just with more of it.

So really you need to look at everything you are doing not just these debts in isolation. You need debt or financial coach something like Dave Ramsey on YouTube.

Though the one on social media do tend to focus on people who run up debts on trivial stuff as that's easy to fix and not those with more serious issues.

phormium

There is nothing wrong in theory with consolidating debt but as above poster commented you must also change the habits that got you there unless it was for a very specific purpose such as home improvements or something that won't be repeated.

It's very like going on a diet, losing weight but then going right back to the same bad eating habits that got you needing a diet in the first place!

As all the debts are with same provider it's definitely worth approaching them, if all were different then most lenders wouldn't want to take on another's unsecured debt but your lender is owed it anyway so in their best interests to make it possible for you to pay it.

If you don't have a credit union account then open one, they can be handy and often look kindly on consolidating debt for genuine cases, income etc all being ok obviously.