How to Structure Debt

[tokono]

Here is my Q.

2.4k OD @ 11.85%

8k @ 13.8%

Personal Loan -2.5K @ 8.650% (about a year left)

All with AIB

Currently about 14k in Debt. Have 8k in Credit Card debit, 2.4k Overdraft and 2.5k on a personal Loan.

What's the best way to restructure this into one payment? Would I be better off clearing the Loan first (could do this over 2/3 months)

Would it be worth transferring the CC to Another bank for the interest free balance transfer.

Have never missed a payment or Either loan or CC

 

[danjpos]

@tokono First thing to do is put a halt to any and all spending on the CC or anything that drives up your debt further. Literally chop the CC in half if you can (appreciate it might still be needed for emergencies etc. but be disciplined otherwise!)

For the CC you might be able to transfer the balance to a 0% promotional offer with the likes of AnPost or Avant money, that will give you time to pay down the balance without paying major interest. Those products require a new application so you’d still need to qualify on all the basic terms.

As for the personal loan, see if you can top up that loan to pay off the OD which will leave you with one personal loan on lower rate and (ideally) 0% on the cc for 6-12 months so you can knock it down

Now the most important part:

You need to look seriously at spending habits and see where you can cut back. Do you have car payments? Can you trade down? Do you have discretionary spending? What can you cut out / cut down.

No amount of financial engineering is going to solve the debt pile if you don’t fundamentally address the Money In / Money Out problem.

Appreciate it might have been unavoidable and people get into debt for all kinds of reasons like healthcare expenses which are understandable.

Only you can take take control of this situation and dig yourself out.

14k is a wedge but it’s manageable and you’ll come back from it if you’re disciplined and honest with yourself.

Good luck OP

 

[adonys]

@tokono Consolidation loan with a credit union - ours did these at 8%. Close Cc and o/d. Pay ahead & start saving for non regular expenses

 

[debs88]

@tokono Pay off your credit card, get an overall loan at good interest. Stop spending on credit and reduce limit to 1000

 

[mikap]

@tokono The first question that needs to be answered is how much money is coming in and going out, from that you can plan which debt to tackle first and not increase the debt