Consolidating my Loans

S

scolari-ire

Guest
Hi All,

Im in a bit of bother at the moment. I have a few loans which are starting to hurt me and would like some advice on what to do? Should I consolidate etc.
Here is what I owe:

Bank Loan: AIB = 12,593 @300pm
Bank Loan: BOI = 5000 @180pm
Credit Union = 12,400 @260pm

So basically Im paying back €740pm in loans, I earn €1900pm and live in Dublin so this is crippiling me.

I was looking at consolidating the loans and hopefully paying back over more than 5 year and once I start earning more i would pay off more. But all i could find was a loan for €30000 paying €600pm over 5 years.

Would it be worth it to consolidate and pay €600 pm.

Keep in mind I am renting and have no morgage.

Thanks in advance.

Scolari
 
Hi Scolari

How much rent are you paying?

1900 - 740 = 1160. Assuming your rent is the average - €600ish - then that leaves you with €560 a month. With careful spending (e.g. minimum alcohol) you should be able to easily live on €560 per month. So before you do anything, sit down and have a think about your current expenditure.

Consolidating your loans is not a bad idea. But only do this if you can create a strict "no more debt" and "no more crap I don't need" policy.

I was once in debt, roughly the same as you, and I got out of it. As a result, I am now a great saver.

Stay positive, you will eventually have the debt paid off.
 
Have you checked out the budgeting/debt management tips in the key posts pinned at the top of this forum?

What are the rates and terms on each loan? How much have you got in CU shares/deposits while carrying €12K in debt from them?
 
Im not sure what the rates are on the loans, ill check later on and get back to you. I dont have many shares in the credit union at all, maybe 200, so i cant really pay off the loan with that ha ha.

With a loan from AIB or BOI if I pay these off early will i get penilised ?
 
Flax said:
Stay positive, you will eventually have the debt paid off.
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Im trying, 560 would be managable but its all those things that i dont plan for like car insurance that would end up crippling me for a few months.

Id love to go to someone like gemoney and pay of 600 pm over 5 years, and when i did start earning more i could maybe pay off 800 and then eventually 1000 pm (few years away yet though).

But as i said above, im not sure if ill get penalised for paying the loans off early?

Scolari
 
while most of the banks say the maximum term on a personal loan is 60 months (5 years) if you go into your branch or ring them they can be more flexible. but would agree with other posters try get it down asap.
 
scolari-ire said:
Im not sure what the rates are on the loans, ill check later on and get back to you. I dont have many shares in the credit union at all, maybe 200, so i cant really pay off the loan with that ha ha.
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I would be surprised if any CU allowed you to borrow €12K on the back of €200 in shares/deposits. The rules of most would not allow this.
With a loan from AIB or BOI if I pay these off early will i get penilised ?
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Depends on the nature (e.g. fixed or variable) and terms & conditions that apply to these loans. Impossible to say without more details.

Have you contacted MABS for advice?
 
I see you mention >but its all those things that i dont plan for like car insurance that would end up crippling me for a few months.

If you are serious about getting out of debt then can you sell your car and use some of that money to pay of debt? Depending on the car you have if it is worhth a good bit you could sell it and get an old banger and release some money that way or even consider selling it and having no car at all. Yes it might be a bight of a hassle getting public transport but it might allow you to get out of debt faster.

Also do you have any scope to take on a bit of part time work at the evenings or weekends, or maybe doing overtime at work? You need to get creative on ways you can bring in some extra money.

Good luck!
 
scolari-ire said:
Im trying, 560 would be managable but its all those things that i dont plan for like car insurance that would end up crippling me for a few months.
Click to expand...
You need to budget properly for all expenditure so that stuff like this doen't come as a surprised and throw you off track.
 
The implementation of the rules re ratio shares/loans in CU's is well gone. It would be possible to get a large loan with €200 in shares. I think granting of loans is now based on personal knowledge of the applicant and his/her ability to pay. Most credit unions will request personal details to assess this i.e. a pay slip etc. I suppose they had to relax the shares/loans ratio to combat increasing competition.
 
I'm not sure if the rule still exists or is ignored but I know credit unions give substantial loans irrespective of shares. AFAIK the individual member is assessed on other criteria, e.g. past record paying off loans, security of job, assets, etc etc.
 
Certainly at my CU when I inquired about a loan and how much they would be willing to loan me I was told that for a first loan 3 times the value of my shares was the maximum they could loan. However they went on to say that in the case of subsequent loans that ratio did not apply and history of repayment would be the significant factor. If the OP has a proven track record with their CU they could well be allowed to borrow more.
 
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