# How can I consolidate my debts



## Ellie (16 Apr 2007)

I am at present paying off 3 loans every month along with 3 credit cards. And it has got to a stage where I am playing catch up constantly. I havent missed repayments but I can see it happening in the future. The debts total approximately 30,000 and have built up since I was in college. I want to get a loan to consolidate all of my debts into one monthly repayment, and also to pay off credit cards. Each of them has been cut up and are no longer in use!! They are a curse! Can anyone tell me of any institution that could entertain me. Most places I have checked out keep bringin mortgages into it but living at home with my parents I dont have a mortgage. I have approached AIB, BOI and Permanent TSB but to no avail as its such a high amount. If I get this laon I can finally regain control.

Any advice is welcome.

Thanks!


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## Welfarite (16 Apr 2007)

You should contact MABS (Money advice bureau)  http://www.mabs.ie for their advice. Are you a member of a Credit Union?


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## demoivre (16 Apr 2007)

Tesco finance might be worth considering. According to the info in the link they give refinance loans. 30k would have repayments of around €589pm over 5 years. [broken link removed] is another lender you could try.


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## ClubMan (16 Apr 2007)

Ellie said:


> I am at present paying off 3 loans every month along with 3 credit cards.


What are the details of the loans/cards - e.g. original amount, outstanding amount, term and rate? What is your income?


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## nelly (16 Apr 2007)

are these credit card accounts closed as you have paid them taking out a loan each time? Could you get a non intrest loan from your parents and pay them money each week (€100pw for 6 years without intrest). The likes of GE money may be the same issue in under a different name as some of these lenders charge as much as the credit card rate in teh first case. so if i were you i would go to MABS and see what loan product that they may advise for you. 
Its a huge amount to have to pay back but one you start time flies and its important not to dispair, well done for facing up to the bills and working on getting them behind you.


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## Ellie (23 Apr 2007)

Thanks for the response guys and I apologise for the delay in getting back to you. I have since cut up the Credit Cards. Am just paying off the balance on them. I have tried tesco finance and I got refused and unfortunately one of the Loans I have is with GE Money and they wont accept my application to top up my existing balance. 

Im at a loss. I am with a credit union and I am at present applying for a budget account, whereby payments come out of my wages at the end of every month and the CU pays each bill. However this is costing me 200euro more a month that it would if I got a loan to refinance.

As it is I am scraping by, I actually cant afford the extra 200 but feel I  have no choice. My own fault I know. I will never ever get this way again!


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## ClubMan (23 Apr 2007)

You should post detailed information as I asked for earlier (e.g. of the loans, rates, terms, income, expenditure etc.) and maybe people can suggest ways for you so save. Of course you should be doing this anyway now after talking to _MABS _and tackling their budget spreadsheet to see where the money is going and making savings if possible.


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## HotdogsFolks (23 Apr 2007)

Ellie if you don't mind me asking, what age are you and how much are you earning? Do you pay rent or a mortgage?


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## Ellie (23 Apr 2007)

I am 24 and living at home, so no mortgage. I earn approx 25000 per annum


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## irishpancake (23 Apr 2007)

Ellie

You do not say whether or not you have actually contacted MABS.

If you haven't, i would advise you to do so immediately, as they have a [broken link removed] for dealing with situations such as yours, which is not painless, but will get you back on the straight and narrow.

As MABS suggest, you such *write* to your creditors, as per MABS advice:



> It is very important that you, without delay, make contact with those to whom you owe money in order to explain your financial situation. You can do this in person, by phone or by letter. Our advice is to make contact by letter. Do remember to keep a copy.



You can check out the closest MABS contact point [broken link removed].

Please please contact them, and do not get into further debt. When in a hole, stop digging.


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## Bob_tg (23 Apr 2007)

Ellie - You may also need to consider boosting your income and reducing your expenditure.

How many hours per week are you working?  Have you any capacity to add to your income by working part-time @ weekends or evenings?  Or can you do overtime?  Have you a car that you can sell?  Can you cancel foreign holidays?  Can you avoid shopping for a while?  Stop buying Lotto tickets?  Can you eat less Chinese take-aways?   

Bob


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## Ellie (23 Apr 2007)

I have cut back on shopping, Im a real woman when it comes to that. I havent contacted MABS as I was going to try this budget account with the Credit Union. As it means the money is gone out of my wages before they even hit my bank account and the Credit Union distribute the money to each organisation accordingly. The beauty of this is then whatever goes into my account is mine to live off. I already save (thru my wages also, same process) each month so as far as savings are concerned Im not worried. However i want to beat this without dipping into savings if at all possible!!


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## Ellie (23 Apr 2007)

Thats money I dont even think about to be used when it comes to buying a house etc. I just need to get these debts cleared, before I get bad credit record. I have thought about part time job, but at the moment I have very little time as aswell as working full time I am studying part time for a degree. Maybe over the summer months I will consider a temporary part time job.


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## Joe Nonety (23 Apr 2007)

I think the main priority should be the credit cards as presumably they have a high rate of interest. 
You save a lot in interest by applying for Halifax and Ulster Bank credit cards which are interest free for transfers and purchases for 6 months and 9 months respectively. After the 6 months the Halifax card is only 9.5% interest.
Try and get them to match the credit limit on 2 of your current credit cards - you'll probably have to send in evidence of your current credit card limit to do this. Make sure to cancel your old cards as well to avoid the €40 stamp duty.

Going by your rejections so far it seems unlikely you'll get the full amount from one bank and thus at the cheapest interest rate possible unless you can get one of your parents/rich relative to be a guarantor - is this possible?

Also, have your asked PTSB, AIB and BOI how much they would be willing to loan you? Even if you can't consolidate your debt into one loan, perhaps try consolidating into two loans as anything that gets rid of the credit card debt is a positive step.

A €30,000 loan at 8% interest can be paid off over 5 years at €600 a month which would make you debt free at 29. Being free of debt would make a big difference if you were applying for a mortgage. Is €600 a month something you can manage or do you need Eddie Hobbs to come in and help you make a few lifestyle changes?

The €200 per month for the Credit Union service is way too expensive.


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## HotdogsFolks (23 Apr 2007)

Ellie said:
			
		

> However i want to beat this without dipping into savings if at all possible!!


 
Hang on - you have savings? It is absolutely in your interest to use your savings to pay off your debt.

Looking on the bright side, you're young and (I presume?) have no rent. If you cut out the alcohol and junk food, you can defo add a few more hundred to your bank account every month.

I'd forget about the savings plan though... Seriously, saving money while paying high interest makes no financial sense whatsoever.


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## Joe Nonety (23 Apr 2007)

HotdogsFolks said:


> Hang on - you have savings? It is absolutely in your interest to use your savings to pay off your debt.
> 
> Looking on the bright side, you're young and (I presume?) have no rent. If you cut out the alcohol and junk food, you can defo add a few more hundred to your bank account every month.
> 
> I'd forget about the savings plan though... Seriously, saving money while paying high interest makes no financial sense whatsoever.


 
I think it's always worthwhile to have some savings for emergencies.


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## Bob_tg (23 Apr 2007)

Good point.  Maybe 2-4 weeks' income, max.  In this case, Ellie does not own a house.  If you own a house, then maybe three-six depending on the mortgage/circumstances.


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## HotdogsFolks (23 Apr 2007)

She lives with her folks though, so she's not exactly on her own. I think if I were her I'd forget about the savings.


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## ClubMan (23 Apr 2007)

Yeah - savings changes the picture dramatically. Use them *all *to reduce or clear your debts in my opinion. You are living at home so you don't have to worry about that presumably. Once you have cleared your debts then worry about saving/investing.


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## Ellie (24 Apr 2007)

Joe Nonety said:


> I think the main priority should be the credit cards as presumably they have a high rate of interest.
> You save a lot in interest by applying for Halifax and Ulster Bank credit cards which are interest free for transfers and purchases for 6 months and 9 months respectively. After the 6 months the Halifax card is only 9.5% interest.
> Try and get them to match the credit limit on 2 of your current credit cards - you'll probably have to send in evidence of your current credit card limit to do this. Make sure to cancel your old cards as well to avoid the €40 stamp duty.
> 
> ...


 
Joe €600 a month is definitely affordable. That is what I had worked out the payments to be when I decided to go for consolidation loan. Problem is I cant get a loan newhere for this purpose. I know everyone is saying use my savings. I will use an amount to get the ball rolling but I want to keep some in the account. Its just the way Ive been brought up. I want to keep it in case of emergency.


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## Ellie (24 Apr 2007)

Joe, This morning I contacted both Permanent TSB and BOI to see if I can get a loan from each to the total I need to consolidate. So fingers crossed! Thank you for that piece of advice as If I get both loans the total repayment actually works out a little cheaper than getting one loan for the 30000, if you get me! Thanks to everyone who has contributed to this thread so far, Your advice has been so helpful. Keep it coming!


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## irishpancake (24 Apr 2007)

Ellie, are you for real  

You come on here and give a picture regarding 3 loans and 3 cc balances with crippling repayment schedules, which you apparently no longer can afford. 

That's *six* instirutions you owe short-term debt to.

Going on your original post, it seemed that you were in a dire financial situation, which required drastic remedies.

You seemed intent on pursuing a solution which would involve entering into further debt, possibly over a longer period, to pay off the existing debt.

Then you blithely inform us that you have savings  

Why have you not used these savings to reduce your debt mountain??

Credit card interest rates are usually in the 14%-19% range, sometimes higher.

Your savings are at best generating 4%-5%, possibly less. 

Use the bloody savings, all of it, to at least reduce the amount you need to refinance.

When you have sorted out the debt problem, open a High Interest Regular Savings account with either Halifax, AIB, or some other institution, which are presently giving 7%.


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## Joe Nonety (24 Apr 2007)

Savings are important to have no matter what the debt. Having no money when you've an emergency like needing to go abroad for the funeral of a close friend/relative can be agonising. Also, let's say the debt is consolisated into a 5 year loan, you can't expect someone to have no life for 5 years (while they're in their prime) so the best way to pay for luxuries like holidays/shopping spree/someone's wedding is to save for it in advance as opposed to just putting it on the credit card and worry about paying it later which I suspect was the case before.
However return from savings should be maximised - up to 7.1% can be earned on regularly monthly savings these days. 
Saving €500 a month would be pointless when having so much debt but something like €50-€150 would be enough for an emergency fund without being too high.

PS Halifax are also good for loans - 7.2% for €15,000.


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## HotdogsFolks (24 Apr 2007)

She lives with her folks though! I would assume that means she's somewhat "still being taken care of" so if there was an emergency they would probably want to help out.

The fact that she wants to take out more loans rather than use her savings makes me think her lack of financial skills are going to continue for some time...


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## nelly (24 Apr 2007)

HotdogsFolks said:


> She lives with her folks though! I would assume that means she's somewhat "still being taken care of" so if there was an emergency they would probably want to help out.
> 
> The fact that she wants to take out more loans rather than use her savings makes me think her lack of financial skills are going to continue for some time...



way harsh!! 

But i do agree and think OP needs to understand debt builds, just because you are paying it off does not stop the interest rate kicking in. Savings are not making as much intrest as your debts intrest is building up - bottom line is any money you have should be used to get down the principle. 

Also i suggest that you should get rid of this lump against your loan as you seem to be a cronic shopper (as its 30k debt on shopping not college loands etc ) and its only a temptation there that you can spend. 

Its commendable that you want to have a nest egg there but its costing you money if I might put it like that. 

Do your parents know you are in debt to the tune of €30k??


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## ClubMan (24 Apr 2007)

Joe Nonety said:


> Savings are important to have no matter what the debt. Having no money when you've an emergency like needing to go abroad for the funeral of a close friend/relative can be agonising.


With no debts you could probably borrow for such emergencies. If the chosen option in this case is to keep the savings but borrow more to consolidate the debts then that, to me, is really crazy.


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## Noor77 (24 Apr 2007)

I agree with Clubman. The OP should definitely forget about the savings at the moment. She should also seriously look at how she is managing to accumulate so much personal debt at such a young age. Her level of debt exceeds her annual income by €5k. 

As she does not have a mortgage and probably does not pay the going rate in rent (due to the fact that she lives at home) the vast majority of her debt must be due to lifestyle spending. I disagree with the poster that said something along the lines of "you can't expect a person to live frugally in their prime" - this is exactly the kind of attitude that got the OP into debt in the first place. She has made the important step of admitting she is in difficulty, but there is no quick-fix solution to her problem and she will have to pare down her lifestyle expenditure if she is to make a committed attempt to getting herself out of her predicament.


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## nelly (24 Apr 2007)

Joe Nonety said:


> you can't expect someone to have no life for 5 years (while they're in their prime)



just reading this now, no offence intended but i think this is rather a silly statement to be honest. People saving for deposits etc can and do accumulate 30k by the time they are 30 not think they are great for paying off loads accumulated by spending on "shopping" by the time they are 30. I speak from my experience - I wouldn't say i had no life while i was saving (and renting), just one with different priorities and it paid off and as i am 28, debt free but with a mortgage & husband am still in my prime, having missed out on nothing I can think of!

Ellie, i feel you need to sit down list your goals you want to achieve in life(homeownership?, qualification, nice car), the obstacles you need to overcome   and make a realistic plan and time line as to how you are going to do it, (second jobs, night college). Its good you recognise enough is enough regarding your debt but i think you need face up to all of it and recognise that by saving cash you are slowing down your debt repayment. 

*You need to be saving with Halifax in the account mentioned for  year before you can get access to it (having accumulated the 7% intrest.)


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## Noor77 (24 Apr 2007)

I actually can't believe that the OP was able to get so much credit. It's crazy. I earn €50k pa and her level of personal debt is equivalent, in relative terms, to my having €60k unsecured personal debt. It's bizarre


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## HotdogsFolks (24 Apr 2007)

Noor77 said:


> I actually can't believe that the OP was able to get so much credit. It's crazy. I earn €50k pa and her level of personal debt is equivalent, in relative terms, to my having €60k unsecured personal debt. It's bizarre


 
I think it's worse. With 50k pa you take home about 3k a month, right? That means you can easily pay off (assuming you're renting) 1.5k per month.

When you earn 25k per year, you don't have quite as much excess money to pay off debt.


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## Joe Nonety (25 Apr 2007)

nelly said:


> just reading this now, no offence intended but i think this is rather a silly statement to be honest.


 
Are you saying she should have no holidays until however long the debt takes to be paid off?

Also to Noor77 I didn't say "you can't expect a person to live frugally in their prime", I said you can't expect somebody to have no life for 5 years which is a big difference.
For someone with a big debt, a big enough expenditure like a holiday should be saved for in advance and not just thrown on a credit card or have a loan taken out.



ClubMan said:


> With no debts you could probably borrow for such emergencies. If the chosen option in this case is to keep the savings but borrow more to consolidate the debts then that, to me, is really crazy.


But she does have debts and if there's some emergency she's surely better off by having instant access to saving funds like with AIB as opposed to having to organise the borrowing of more money.


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## nelly (25 Apr 2007)

Joe Nonety said:


> Are you saying she should have no holidays until however long the debt takes to be paid off?


That depends on how badly she wants to pay off her debt now doesn't it! Personally i could not justify the €1 - €1.5 holiday if i had a €30 k debt mountain (thats the cost of the cheapest foreign holiday with the girls in your 20's), i know it wouldn't do me any good at all. 


Joe Nonety said:


> For someone with a big debt, a big enough expenditure like a holiday should be saved for in advance and not just thrown on a credit card or have a loan taken out.


Agreed. 
It may seem harsh but the OP here is earning 24k paying back 600+ a month so how long does will she have to be saving to have a holiday with spends? i think it would be too much of a temptation to get out the credit or loan again, 'just this once'. If in her shoes i would advise her to take her holidays at home - a gang of mates collect the supervalue stamps and book a week in Ireland somewhere for example (€299 the lot) - friends who are also more than likely saving for their own goals or trying to pay back bills, until she has reached a particular goal say paid half of her bills back and then head off on holidays as a "reward".
She does not have to have " no life" but lets face it, earning 30k and having 30k debt is a lot different to earning 24k and having 30k debt and living without a holiday every second year is probably going to be the bottom line until she gets back on top of things. 
(these were the holidays I used to go on while in college and just after, now it is so common to go on holidays after the LC and i just think a reality check is on order. Holidays can be spent at home, recharging batteries for free, especially when you don't have the money to spend)


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## irishpancake (25 Apr 2007)

Ellie, just so you are aware of the implications, the fear you expressed originally regarding not being able to sevice your current debt.



> I havent missed repayments but I can see it happening in the future.



If you don't do something asap, and you do miss any payment, particularly CC debt, you will then have a black mark against you for the next 5 years with the ICB, and debate about whether to consolidate or refinance or whatever will be academic.

Not sure if your savings is SSIA or whatever, but you should seriously consider using them to avoid such a situation occuring. 

You have received lots of advice here, as you asked for. 



> Thanks to everyone who has contributed to this thread so far, Your advice has been so helpful. Keep it coming!



You should now take some of it.


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## Ellie (3 May 2007)

I appreciate what you are saying but im with joe on this one. I want to have an emergency fund. As i said I will some of my savings to get it started but I wont use them all. And I take offence to some of the remarks that were made. Yes its my own fault for getting into this mess and I want more than ever to get it under control. I do not need people putting me down for it. I have made a mistake and am holding my hands up and doing somethin about it. Noone is perfect, and we all leanr from our mistakes


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## HotdogsFolks (3 May 2007)

Ellie said:


> I appreciate what you are saying but im with joe on this one. I want to have an emergency fund. As i said I will some of my savings to get it started but I wont use them all. And I take offence to some of the remarks that were made. Yes its my own fault for getting into this mess and I want more than ever to get it under control. I do not need people putting me down for it. I have made a mistake and am holding my hands up and doing somethin about it. Noone is perfect, and we all leanr from our mistakes


 
Obviously do whatever you want to do, but it does seem like you came here looking for someone to agree with your current strategy rather than seek new, helpful advice.

Only one person agrees with you, and everyone else disagrees.



			
				irishpancake said:
			
		

> If you don't do something asap, and you do miss any payment, particularly CC debt, you will then have a black mark against you for the next 5 years with the ICB,


 
I'm not sure if that's true. I pay my CC online (manually) and over the years I've forgotten to pay both my AIB and MBNA card. Yet my ICB report is spotless.

Loans on the other hand, they definitely affect your ICB report.


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## gordongekko (3 May 2007)

Ellie

Have you a car that you could trade down with and use the extra funds to reduce your debt?


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## SidTheDweeb (4 May 2007)

Ellie said:


> I appreciate what you are saying but im with joe on this one. I want to have an emergency fund. As i said I will some of my savings to get it started but I wont use them all. *And I take offence to some of the remarks that were made. *Yes its my own fault for getting into this mess and I want more than ever to get it under control. I do not need people putting me down for it. I have made a mistake and am holding my hands up and doing somethin about it. Noone is perfect, and we all leanr from our mistakes



I take offence to someone who comes on here bemoaning huge loans, implying that she may get a bad credit rating, and then belatedly informing the people here that she SAVES every month.

And on top of that you obviously have savings to fall back on!

I can't think of any possible emergency scenario that would override the good advice of using your savings to minimise your debt.

Sure if you paid off even one of your credit cards, surely the limit on that would be sufficient to cover any emergency, likewise with the other 2 credit cards!!!


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## BillyNoMates (4 May 2007)

> Have you a car that you could trade down with and use the extra funds to reduce your debt?


 
I sugguested this to a (lady) friend of mine before who had money problems. I was shocked at what she said. 
"Cars are like boyfriends you can change to a better one but you can't downsize!! "


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