Advice on consolidating Debt (CC mainly) Credit Union?

[ShortOfCash]

Hi There,

Hope I'm posting in the right place - any advice really appreciated on the below - I'll just lay out a few point on my finances - sorry if too much or not enough details provided!

My main query surrounds whether I should get a credit union loan to pay off my credit card (I plan to cancel it and avoid getting in same situation again once paid (I reckon the advent of Visa debit makes it obsolete, for me anyhow).

Renting, 35k Salary, weekly general (non loan/CC) outgoings €350 approx. Paid weekly. Net pay varies a little with BIK and some overtime, but average of €525.

I've just finished off paying a Credit Union loan, and transferred my shares to pay the balance this morning, leaving me with €1'730 in shares. I have been paying €110 per week in to that loan for just shy of 3 years.

I have been availing of my overdraft on my BOI current account pretty much all the time for the last 2 years so I tend to be minus €200 when I get paid (overdraft of €560)

My BOI Credit Card has been sitting more or less at the max €4'500 for well over a year - current balance is €4'300 and I'm just paying the minimum each month (I used to be able to pay a bit more and was making a dint, but not anymore).

I also have a couple of small debts to family members and a staff loan.

So - to get my current account to €0 on a payday and start from scratch and pay off the small loans also I would need €5'180.

I can either withdraw my CU shares and pay that amount in to my CC and then increase my payments to CC....
Or I can get a CU loan, pay off and cancel the CC and the other debts.
Third option I suppose is to withdraw the CU shares pay off other debts and then pay a smaller amount in to CC.

Any thoughts on what I should do would really be helpful (bar spending less money - which is, I know an obvious solution!!)

In terms of paying off, I was thinking of paying €70 a week in to a CU loan which would see the whole amount paid off in 18months leaving me with same share value or just the loan amount paid off in 12 months leaving me with shares to transfer to remaining loan balance.

If going with the option of withdrawing shares - I planned to start with 10% of cc balance for 6 months, move to 20% for 4 mths, then 50% for 3 months before a final payment

thanks a mill

 

[michaelm]

If it were me I wouldn't take out any more loans. I would pay off the small debts and get my account into the black using CU shares, then just pay the €500 hundred per month into the CC that was going into into the CU. Not the most efficient way perhaps from an interest rate point of view but it's simple, and lessons can be learned sometimes by doing things the hard way.

 

[Gerry Canning]

If it were me I wouldn't take out any more loans. I would pay off the small debts and get my account into the black using CU shares, then just pay the €500 hundred per month into the CC that was going into into the CU. Not the most efficient way perhaps from an interest rate point of view but it's simple, and lessons can be learned sometimes by doing things the hard way.

I agree, the problem with consolidation is that around xmas/holidays it WILL be very tempting to (just once!!) use Overdraft or credit card. Also most people believe they can repay MORE than they do !!!

 

[Slim]

I would disagree with the previous posters. I would suggest approaching the CU for a loan of €5,200 and clearing off the CC and overdraft. The reason for this is that the interest rate with the CU will be much leass than the CC. Don't necessarily tell CU it is for clearing a credit card, but perhaps holiday or home improvements. This will mean you have no scope to borrow from CU until you clear down a good portion of the loan. Also, it is important that you avoid repeating the debt, so cut up the credit card and try not to go into debt until the CU is cleared. This suggestion is based on good borrowing record with CU and no ICB problems.