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Debt consolidation

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  • 15-06-2014 7:03pm
    #1
    mangana2
    Registered Users Posts: 2 ✭


    hi,
    i own my own home with no mortgage. i have a large loan with the CU that at the minute is approx 34K. this is for home improvements and a car. i have 4.5 years left on this.
    i owe about 2K on the credit card and am in my overdraft up to 2k.

    i am hoping to get more home improvements done to about 18k and clear up the credit card, overdraft and get a few others bits done.
    all in all i would need 60K to clear my CU loan, clear CC and overdraft, get my final home improvements done and a few other bits and pieces.

    i am looking to see what i can with my home.
    a ten year personal loan? what is my best course if anyone has any advice out there!

    thank you


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    #2
    coylemj
    Registered Users Posts: 25,437 ✭✭✭✭coylemj


    By all means take out a 10 year loan for home improvements but it would be bad practice IMHO to include overdraft and credit card balances in a loan of that duration because you will be paying a huge amount of interest on what should be a short term loan.

    My attitude is that the loan duration should be only for the life of the item you're buying or less meaning that the loan duration for a holiday should be a year or less, for a car five years or less and so on. Consolidating a credit card balance into a ten year loan would not be a good idea because typically as soon as the slate is clean, you will rack up a bill of the same size in no time at all and be worse off than where you started. Take the pain and pay off the CC and overdraft with a 12 month loan.


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    #3
    matt70iu
    Registered Users Posts: 415 ✭✭matt70iu


    mangana2 wrote: »
    hi,
    i own my own home with no mortgage. i have a large loan with the CU that at the minute is approx 34K. this is for home improvements and a car. i have 4.5 years left on this.
    i owe about 2K on the credit card and am in my overdraft up to 2k.

    i am hoping to get more home improvements done to about 18k and clear up the credit card, overdraft and get a few others bits done.
    all in all i would need 60K to clear my CU loan, clear CC and overdraft, get my final home improvements done and a few other bits and pieces.

    i am looking to see what i can with my home.
    a ten year personal loan? what is my best course if anyone has any advice out there!

    thank you

    Most personal loans tend to be over a max of 5 yrs but you could talk to your bank and see what they say.

    A word of caution though. I did the same as you in the 00's, problem was my overall debt was increasing all the time. When I lost my job in 08, I was up s... creek without a paddle.

    5-6 years later, I'm still paying that off with over 8k to go. So you can imagine what the over all debt was at the start! Try to operate a policy of paying down your debt rather than racking it up, if possible that is.

    Borrow for a house, borrow for a car and save for everything else.


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