# Loan Consolidation - Advice Please



## Ringo2009 (5 Aug 2009)

Hello

I am looking for some advice on how to consolidate Loans and Credit Cards.  My problem is that I managing my outgoings very badly, in that I pay way too much interest for loans and credit cards. Here is some background information:

Background Information:

I am employed by a solid organisation, have no risk of loosing my job
Salary €85,000 p.a (Net Income is about €4,350 p/m)
Rental Income €600 p/m
Single, with no dependencies (no wife / no kids) 
I pay my monthly mortgages, loans, bills and credit cards without fail
Have remortgaged before, so this is not an option _(at least I don’t think it is)_
No debt collectors after me
 Other Outgoings:

Mortgage: Halifax approx €270,000 outstanding (tracker) (€985 p/m)
Loan 3: €20,000 outstanding (€660 p/m) _* This is outside the scope of this but thought I better mention it_

Debt I am trying to consolidate is listed below = €35,000 in total:

Loan 1: €12,150 outstanding (€364 p/m)
Loan 2: €10,410 outstanding (€323 p/m)
Credit Card 1: €7,000 outstanding (Ulster Bank MasterCard)
Credit Card 2: €2,700 outstanding (Halifax Visa)
Credit Card 3: €2,300 outstanding (Bank of Ireland)

I would like to consolidate Loans 1 & 2, with Credit Card 1, 2 & 3 into 1 monthly repayment of about €1,000 per month (instead of paying interest 5 times, it would be much smarter to pay 1 set of interest rates).  I can afford to pay €1,000 back per month via direct debit.  But, as it *€35,000* I require, before contacting the banks, I know this is going to be an issue with current global crisis etc

Any advice would be much appreciated.
Thanks and regards
Conor


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## UFC (5 Aug 2009)

If I understand correctly, your monthly income is €4950 and your outgoings are (excluding the credit cards) €2332.

€4950 - €2332 = €2618.

You should be able to easily live on €800 per month, so that leaves you with at least €1800 you can throw at a credit card every month.

Going by these figures, you would have credit card 2 and 3 paid off in three months, and credit card 1 paid off less than four months later.

So in about six months you can be debt free on your credit cards.

You can then spend the next six months getting rid of loan 2.

That means in one years time you will only have two loans remaining.

I personally think you should take the above route, as consolidation is a dangerous game - frequently the credit card starts getting used again and you end up with even more debt.


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## Ringo2009 (5 Aug 2009)

Hello and thanks for getting back to me so fast.  In a typcial month, my outgoings for Mortgage, Loans, Credit cards, Bills etc are close to €2,700.  On paper I agree that it should be easy to throw €1,800 on creditcards etc.  However, I tend to be paying off on the credit cards, then having no cash flow, then spending on the credit cards, going around in circles and not actually getting anywhere.  

The reason I need to consolidate is to be able to set aside €1,000 per month on a €35,000 loan so as I know there is a end target.  

What lending organisation would consider this type of €35k consolidation loan?


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## luckystar (5 Aug 2009)

What are loans 1/2/3 and 3 credit card debts as a result of? If it's lifestyle spending then a consolidation might not be a good plan as you could find yourself in a similar situation in months/years down the line. Completely agree with UFC's advice and cut spending dramatically. Realistically you have an income of almost 5k with no dependents and a relatively manageable mortgage, cutting lifestyle is the best way forward. Credit union might be an option with some of the credit card debt, but would only suggest this is you are prepared to pay this off quickly, reducing interest you are paying on credit cards being top priority


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## Lsquared (5 Aug 2009)

Hi. Your reason for seeking debt consolidation did not make any sense to me with regard to a target. It seems to me that you are missing the woods for the trees or something like that. If you are having no difficulty making payments on a range on loans/ cards, and have a cash cushion of over 1000 euro each month, then I cant see a reason for seeking to roll this up in a consolidation loan. You are only achieving reducing the number of loans, not the amount owed. My view of consolidation loans is that they provide relief for those who are having severe cash flow problems and/or have poor management skills (missed payments, forgetting to pay etc). The cost of ease in such a situation is that the overall debt becomes more expensive as you stretch the term, and you may be securing this debt against your property which could be a risk. 
You should look beyond the number of individual loans and prioritise knocking off your credit card debt. If you are target oriented, go after the smallest balance first and then move on, as already advised. you should get some satisfaction in closing out those smaller balances before Christmas. ​
Good luck. I am a firm believer that you cant borrow yourself out of a debt problem - just knuckle down and consistently target one at a time while keeping up the appropriate payment on the remainder.


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## niceoneted (5 Aug 2009)

What UFC says is the way to go for sure. You don't seem to have money set a side for every day bills eg esb, gas, insurances, petrol etc. I would suggest you set up a separate bank account for this and lodge 400 a month to it. Then take out 150 every Fri and make it last the week, Bring lunches to work, I'm sure your wardrobe is full of clothes, so you won't need to shop. Just for 1 yr say enough is enough and clear this debt then you will be able to relax and enjoy life again. Every one else is cutting back so just join in. 
I don't think you will get a consolidation loan based on above. You hear of others in less of a state as you with as high of earnings not getting loans.


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## wbbs (5 Aug 2009)

Very much doubt any bank will refinance all that short term debt, take the advice given and watch your budgeting.  Your income is excellent and again I would be more concerned at how all the borrowing came about.   I deal with loans, or whats left of them, and no way could I submit an application for your proposal.


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## Bronte (6 Aug 2009)

You are not giving us the full details. You say you have remortgaged before which sends alarm bells ringing, what were the reasons for that, as based on your reply which I can guess at, I would suggest you are not a good candidate for consolidation. You mention two strange things, one is that there are no debt collectors after you and you just about mentioned a loan of 20K but you weren't going to. 

Does your rental income cover the mortgage?

I don't think you manage your outgoings very badly, you are quite clearly overspending. Why on earth do you have 3 credit cards?

The best advice I can give you is to do the money makeover section.


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## Locke (6 Aug 2009)

Consolidation would be the worst possible thing you could do.

You have already admitted that you find yourself spending and spending. You need to admit to yourself that your are thinking short term consolidating and not thinking down the line when you build up the debt again. Which will happen.

You are on a very good wage. Clear those credit cards for starters. You could do it in 6 months. Avoid spreading it over a new loan for 5 years.

Then work at the loans. On your wage you can do it. Even if you got a bank to consolidate, tbh, you would find yourself in trouble in 2/3 years 
Locke


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## Ringo2009 (7 Aug 2009)

Thanks for the advice folks.  The loans have been for a collection of things, anything from house improvements, work required on car, management fees, travel, family and over spending.  If I had better cash flow, I would be able to concentrate on the smallest debt first, clear it over the first couple of months, then move onto the next one.  Unfortunately, after I pay my mortgage (which has only dropped over the last couple of months, it was €1,396), existing loans, bills, €1,000 on credit cards, I seem to run out of money by the 5th or 6th of each month.  Then, the cycle continues, I use my credit card again to purchase goods, pay for petrol etc.  Add things like once off payments like €1,200 management fees, car tax €530, car maintenance last month alone was €1,100.  

Nevertheless, I have applied to 4 banks to see if some of them will allow me to consolidate 2 loans and 3 credit cards into a €1,000 per month payment.  This ensures that after I pay mortgage, loans and bills that I can live on the  remaining money without using my credit card.  I’ll have to see what happens next.

Thanks to everyone for there help and advice


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## Locke (7 Aug 2009)

Best of Luck Ringo and hope everything works out for you.


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## UFC (7 Aug 2009)

What are you spending all your money on? I don't earn anywhere near what you earn and I can save €1250 per month.


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## niceoneted (8 Aug 2009)

I am with UFC here. I get just short of 3000 most months and manage to save 1500 which is half that amount. I put 400 away for bills eg car ins, house ins, car maintenance, household bills etc. 
I pay 700 on mortgage and the the rest is food, petrol and social life. Oh I also get 250 a month rent at present (brother) which goes along with spending.


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