Offered consolidation loan, not sure whether to take it

D

deviant

Registered User
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Hi there,

I have a number of personal loans with a particular company with varying terms and interest rates, and I have been approved for a consolidation loan to merge them into one 5 year loan.

This would almost halve the monthly repayments but obviously increase the total cost of credit. I'm not sure what to do, as I'm trying to maximise my cash flow (disposable income currently €500 P/M after all bills,rent etc paid) maintain a respectable credit rating and also pay off the loans as soon as I can.

I was going to go ahead with the consolidation loan until someone advised me that I should pay my debt off as quickly as possible as I do plan to start saving for a mortgage in the future and the sooner I pay off my debts the sooner I can start saving. However, I have been extremely stressed about money in recent months, and the first of my loans does finish until early next year. I'm not sure if I can cope with that stress for another year, and having more wiggle room might relieve that for unexpected expenses.

Sorry if that all seems a bit all over the place, any advice would be appreciated.
 
You'd be better off listing the loans one by one, inc interest rate/balance outstanding and what interest rate the new loan would be for.
And do you have credit card debt and overdraft?
 
Would you be allowed to overpay/pay off the consolidation loan early without penalties?
 
In that case, I think you should go with the consolidation, which will reduce financial stress, but make additional payments where possible to reduce the term.
 
I agree with taking the consolidation assuming you can pay extra if you have it to reduce the term and cost.
 
Before you do anything you should go to MABS. I heard they are excellent. They will crunch the numbers for you and might be able to suggest solutions you haven't thought of and might even negotiate directly with creditors. As far as I know their services are always feee. Best of luck!
 
Thanks for all your replies. After talking to MABS I've decided to go ahead with restructuring as I think the peace of mind it'll bring me will be worth whatever extra bit of interest I have to pay.
 
you are doing the right thing, do not miss any of these payments and pay extra if you can, that will help your existing credit record.
 
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