# Loan to get out of Debt



## mtcrowley (4 Aug 2006)

Hi all this is the first time I used this so please forgeive me if I screw it up.

I`m 30 going on 31 living with my long term girlfriend and our two kids in a city council house. My problem is that I have mounting debts and I finding it harder nad harder to meet the monthly payments. I went to my local credit union to see if I could get a loan of 25000.00 last week but they turned me down. I`m need to find some way that I can consoladate all my loans in to one managable loan that I can pay off each month I would be able to manage to pay between 500-650 a month. 
Can any of you point me in the right direction so I can get my life back on track, it`s really getting me down I need to get these loans under control.

I was thinking of try to get a loan from some bank or something but firstly I don`t know whih be the best bank to go with and is that the right thing to do.
If any of you can help please get back to me.
Thanks for taking the time to read this


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## RainyDay (4 Aug 2006)

Hi - Sorry to hear about your difficult situation. The bad news is that you will find it difficult to find a bank that will offer €25k in a personal loan in this way, unless you have very strong income to support repayments. You should contact your local MABS office for advice, though don't expect any instant magic solutions.


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## Thrifty (4 Aug 2006)

I'll second rainyday's advice re MABS. Apart from dealing with the detbs you have now they should be able to help you look at how the debt mounted up in the first place and what you need to do to prevent this happening again and get back in control of your money - vital for living in Ireland


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## tolkarovers (4 Aug 2006)

It also might be worth getting the biggest loan that the CU will give you and paying that back as soon as you can. Once they see that you can make your repayments they may be more willing to grant you a bigger loan after that.


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## Raskolnikov (4 Aug 2006)

mtcrowley said:
			
		

> Hi all this is the first time I used this so please forgeive me if I screw it up.
> 
> I`m 30 going on 31 living with my long term girlfriend and our two kids in a city council house. My problem is that I have mounting debts and I finding it harder nad harder to meet the monthly payments. I went to my local credit union to see if I could get a loan of 25000.00 last week but they turned me down. I`m need to find some way that I can consoladate all my loans in to one managable loan that I can pay off each month I would be able to manage to pay between 500-650 a month.
> Can any of you point me in the right direction so I can get my life back on track, it`s really getting me down I need to get these loans under control.
> ...


Give us an estimate of your income, outgoings and debts and maybe we can offer some short-term solutions to help ease your situation.


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## dillon1876 (4 Aug 2006)

If I was you, I would sit down and prepare a letter for the credit union. Write in the letter your current situation, and how you have learnt your lesson and that you would like to get your financial situation back under control. Explain that you have children and that it's effecting your stress levels. Back it up with copies of your income for the last 3 months or more to show that if you got this loan that you are in a position to pay it back with no problems. Attatch another loan application to the letter and post the whole lot into your credit union. Try and get money from somewhere or somebody to lodge into your savings account with the credit union. Eg. €1,000 to €2,000. or as much as you can get. Just to give the credit union some security and to show that you are serious.

The credit union can be very understanding if approached in the right manner. They are there to help their members.

And yes, this is what i did and I was successful in getting the loan and never looked back. The main thing is to learn from your mistakes and don't fall into the trap of getting more loans again. Because that will leave you with no where to turn then and things can get pretty stressful.

I hope you get things sorted out. It's worth a try anyway to get your peace of mind back! Good Luck with it.


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## lff12 (7 Aug 2006)

Would suggest talking to MABS first.  The general advice given to people in debt is don't borrow more as usually you'll end up paying more in the long term, even though the monthly repayments are less.


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## dam099 (7 Aug 2006)

Just one (perhaps obvious) comment on the title of your thread i.e. loan to get out of debt, what you are talking about is restructuring of your debt (which may or may not be the best thing to do) not getting out of it, you will still owe the same debts just in a different way. 

This may be obvious but its important that you recognise the debts have not gone away lest you start running up more debt once your repayments are more manageable.


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## mtcrowley (8 Aug 2006)

Hi all thank you for all your comments, I didn`t expect to receice so many so fast.
Raskolnikov you were asking me to give some kind of summary of my finances , well here goes;
1 Yearly income of €37,000.00
2 monthly take home €2684.18
3 currently hold 96 J&J shares price not so good, waiting for them to go up.
4 Have an SSIA account due to finish June 2007 exp value €7700.00.
that was the good news , now the bad news......
1 Credit card Ulster €6,000.00, currenly can only pay 200.00 a month
2 Credit card MBNA €4,900.00 due, can only pay 200.00 a month
3 Bank Loan Ulster Bank €7,000.00 due, pay 160.85 a month
4 MBNA Loan €8,000.00 due, pay 295.19 a month
5 I give €550.00 to my partner for the house rent, house bills, kids nad so on.

I went to the credit union for €25,000 but they turned me down. I have just shy of 3000 on my credit union account, they offered me 6000 to pay off one of the credit cards, not what I was hoping for but it is something.

i know you are all saying to go to MABS but beleive me I have learnt my lession when it comes to credit cards and over spending. I want to get a loan over 5 years that will clear off the outstanding and give me one managable loan repayment. To be honest I so want to get married to my partner, we`ve been with each other for 13 years now.`We not looking for a big wedding, in fact we would love to just be able to afford the ring and go away with the kids and get married abroad.
AIB have offered me a loand of 25K  over 5 years with a monthly payment of 495.00, that would clear all of the above and give me a chance to get some savings built up.
What do you think am I mad or what ???????
Do you know of any better way of doing it, or a beter bank . 
one direct just quoted me 419.21 over 5 years for 25K, but the APR is varable....not sure about that one !!!!


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## liteweight (8 Aug 2006)

When you say you've just shy of 3k with credit union, is that a loan or savings? I suspect they were trying to loan you 6k in order to pay off Ulster Bank cc first, as last time I looked their interest rate is 19%!! Think your situation deserves/needs a lot of thought. To be honest, I'm surprised the Banks are being so obliging. Good Luck.


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## RainyDay (8 Aug 2006)

Hi  mtcrowley - Don't rule out variable rate loans. The banks will build a margin into fixed rate loans, so you well end up paying more in the long run. Also, if you want to repay the loan early, you could face stiff penalties. There is security in knowing that you have a fixed repayment amount, but there are downsides to this as well. Focus on the APR% being offered to you - What APR rates are AIB & One Direct offering you? I'd exclude the value of your shares & your SSIA from any proposed borrowing, and you can cash these in at the appropriate time.


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## liteweight (8 Aug 2006)

mtcrowley said:
			
		

> 1 Yearly income of €37,000.00
> 2 monthly take home €2684.18
> 3 currently hold 96 J&J shares price not so good, waiting for them to go up.
> 4 Have an SSIA account due to finish June 2007 exp value €7700.00.
> ...



Ok, so taking all these payments into account and subtracting them from your monthly salary; you're left with 1,278 euro. Out of this I suspect you pay 100 to your SSIA and perhaps a small amount in the credit union. So what happens to the rest, if that's not too rude a question? Your partner is already trying to manage all bills on 550 so if this is the case, can some of the surplus be paid off the loans, just keeping 'pocket money' for yourself. Also what does your partner do with the children's allowance? could this be saved? I suspect she's using it to supplement the 550.



			
				mtcrowley said:
			
		

> I went to the credit union for €25,000 but they turned me down. I have just shy of 3000 on my credit union account, they offered me 6000 to pay off one of the credit cards, not what I was hoping for but it is something.



6000 is a drop in the ocean at this stage, bearing in mind that the Credit Union will not allow you to touch your 3000 savings while you're repaying the loan. When you've paid off some of it and the loan reaches 3000, they might allow you to pay the savings off against the loan but this would leave you without any kind of emergency fund for your family.



			
				mtcrowley said:
			
		

> i know you are all saying to go to MABS but beleive me I have learnt my lession when it comes to credit cards and over spending. I want to get a loan over 5 years that will clear off the outstanding and give me one managable loan repayment.



The reason other posters are telling you to go to MABS, is that this is precisely what they can help you with. They may even be able to come to some sort of arrangement with your creditors as regard to interest on loans etc. They will also help you to work on a family budget etc. so that you can map where your money is going and on what. They're very used to dealing with people in your situation and are very understanding.




			
				mtcrowley said:
			
		

> To be honest I so want to get married to my partner, we`ve been with each other for 13 years now.`We not looking for a big wedding, in fact we would love to just be able to afford the ring and go away with the kids and get married abroad.



I was at a wedding recently in the Registery Office in town, I think it costs approx. 37 euro. It's a lovely place by the way, I was pleasantly surprised and the ceremony was lovely too. Going abroad to get married, especially with three kids in tow, costs quite a lot of money.




			
				mtcrowley said:
			
		

> AIB have offered me a loand of 25K  over 5 years with a monthly payment of 495.00, that would clear all of the above and give me a chance to get some savings built up.
> What do you think am I mad or what ???????



This sounds like a plan to me!! What's the rate? At 495 per month you could afford to put more into your SSIA and perhaps a Regular Saver Account with AIB. You could also afford to give your partner a rise! Sorry, can't believe she manages everything on that amount of money, does she have any other form of income? If she does, you could pool your resources, get AIB paid back as quickly as you can and then concentrate on planning the wedding you want.




			
				mtcrowley said:
			
		

> one direct just quoted me 419.21 over 5 years for 25K, but the APR is varable....not sure about that one !!!!



Are you sure you heard them correctly?? Honestly you should go to MABS, where you can sit down, face to face, with someone and get it all sorted out.


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## irishpancake (9 Aug 2006)

mtcrowley said:
			
		

> one direct just quoted me 419.21 over 5 years for 25K, but the APR is varable....not sure about that one !!!!



Sorry for zoning in on just this one aspect, but i can't see how One Direct could have offered this. 

They would not be one of the cheapest lenders around, in fact I think they could be described as sub-prime.

note their web-site says this: 



> PLEASE NOTE: A sliding scale of rates from 8.65% to 16.85% applies depending on the individual applicant status. This is a variable rate loan and the rates are subject to change.



Also, their on-line quotation will not give a quote for personal loans over €20K. and that amount costs €407 over 5 years, based on 8.65%, which can't be got.


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## Guest107 (9 Aug 2006)

MABS can negotiate _standstill agreements _with creditors....all of them 

If they do this you are still paying outstanding debt as you have so far managed but its not clocking up interest any more which is the good news.

You can then :

1.Stop payments into SSIA (why should you profit when they take a hit you standstill the SSIA in effect yourself). Prepare to redistribute this saving equally to each creditor each month .
2. Take €2000 out of CU and make one goodwill payment of €500 to each loan/card equally at the onset of standstill leaving no more than €1000 in there for 'emergencies' and I mean DIRE emergencies. 
3. Convert fixed loans to variables (standstill = 0% you see so 0% variable allows lump sum payments unlike 0% fixed)
4. Your SSIA comes in next year (less than €7700 as you are not paying it up any more )  Agree to equally pay €1700 to each creditor out of that lump sum. Put the other €800 or less into credit union  for DIRE emergencies on top of the €1000 or give it over to your creditors 

Thats approx how I would propose to structure it.

Also chop up those cards, its obvious to me that you are years away from ever touching a credit card again, saving €40 tax each per annum of course. 

Get an evening job, consider that your own bonus spending money if you are working . If not working you are not entitled to a bonus.

As you pay off one standstill by prearranged schedule you will up the payments to the others out of that, do so immediately . If you miss any payments under a standstill there will be black marks aplenty. 

If you do not miss a payment under the MABS standstill schedule your credit record will be clear in the future when you pay off these standstills  and you will have learnt your lesson, hopefully


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