Best place for a consolidation loan.

[Isaac.t]

Hey guys,
I have been considering a consolidation loan but I am
unsure who to go through as I beleive my bank won't
Lend me the amount I want.
Basic over view is we have about 20k in home assets,
A ute that is worth about 10 and we owe 13 on it, $24k
Personal loan (holidays, cars etc) and a $2500 credit card.
So I need to borrow about $38k.
I have been in my job for almost 4 years and it's government
Work (army), so it's very stable, my credit rating from my free
Credit report is about 650/1200.

So I just want to know what my chances are and who would
be the best to apply for. I am a commonwealth member but I
Doubt the bigger banks will give me that much.

Any opinions or advise will be greatly appreciated.

Cheer guys
Trev.

[disneysteve]

Welcome. How will borrowing $38,000 do anything to improve your situation? Perhaps it might give you a lower average interest rate, though with a low credit score that might not even be true. I'd say it's far better to keep the individual debts so that you can attack them one by one and snowball your payments.

I'd recommend giving us the full picture. List your income and each debt with the interest rate and remaining balance. Also listing your monthly budget would help us give you solid advice as to how to deal with this.

[Isaac.t]

Hey mate,
A more detailed breakdown is

Personal loan (14.9%) $18900
Personal loan (11.7%) $3400
Credit card (21.24%) $2500
Car loan (8.27%) $13350

Invome
Pre-tax $70000 +\-
Post tax $1900 fortnight

Rent and water $497 fortnight

Other bills add up to $300 fortnight.

I'm married with one child, wife normally
Works but currently isn't.

Is that enough detail to give you an idea of
Where I'm at ?

Thank you very much, appreciate any advise
Before I go spend money on a financial advisor.

[Isaac.t]

As for one consolidation loan, my plan was to get it
over a short term like 2-3 years, and also so when I
get bonuses I can put them straight on one loan, and
It would free up my car so I could sell it and pay that
off the loan as I don't need the car at the moment.

[snafu]

Isaac, welcome to SA. Did you know... The research makes it clear that 'consolidation' loans benefit the lender far more than the borrower. In most cases fees, the interest rate [cost of credit], and number of months of the loan costs far more than the short term discomfort of making a plan and paying off existing loans and credit cards. To make matters even worse, in spite of vows to 'never do this again,' people continue their poor money habits to get other cards and other loans supplementing their income or covering shortfalls to escalate the money problems the consolidation was meant to solve.

Is wife onboard willing to accept some cut backs and delay some wants with needs covered to extricate yourselves from debt? Does DW expect to return to the workforce in the short term? The only figures we can work with are net income. Since you would like to sell your car, you need to know what it is worth. It's important to determine the Kelly Black Book [whatever the bank uses to establish value] value in your region. What is the differential between market value and the sum owed $ 13,350.? Would you be willing to sell it privately as they often nets more than a dealership?

It's really important to establish an Emergency Fund [EF] so that you're not driven to add debt to your CCs. I suggest that you and DW go through every room in your home to identify to identify items you no longer use, need, or serve your requirement. Those in good condition can be sold on the local, electronic buy/sell like FB sell page etc. or yard sale to make a start on an EF. 2nd, set a large jar in a drawer and at the end of each day, dump all change in the jar. It's surprising how much accumulates.

I hope you'll follow DS's suggestion and make-up a budget. You've a start with the listing of bi weekly sums for needs [rent/water] please define 'other needs like electric, heat, food [include restaurant/take-out], phone, internet, cable, medical, rental insurance, auto insurance, entertainment, child care etc. The point is to give every dollar a job and know exactly where the money goes.

I believe you can 'snowball' to make this work

[disneysteve]

It would free up my car so I could sell it and pay that
off the loan as I don't need the car at the moment.

If you dont' need the car, sell it. What does that have to do with the consolidation loan? You don't want to take out a new loan that includes that debt if you're going to sell the car anyway. Plus 35% of your total debt is the car. Get rid of that and your situation improves dramatically.

[Isaac.t]

The reason for not just selling the car is because it is under fixed finance and as previously stated it is not worth what we owe. Hence why I was mainly looking into one loan over a short period of say 3 years. Because if I finance 38k over 3 years and then sell the car for say 8, I will then be able to pay less a fortnight and be out of debt quicker. I can't see any other way of getting out of debt (so I can afford a house) any quicker.
As for talking to lendors, I can't see why they would lower interest rates or anything to help, as it stands they are getting there money every week and as far as there concerned I'm not in financial hardship.

[disneysteve]

The reason for not just selling the car is because it is under fixed finance and as previously stated it is not worth what we owe.

You wouldn't want to take out a new loan for the full balance on the car loan but rather just for the difference between what you sell it for and what you owe. So if you owe 13K and sell it for 8K, you only need to borrow 5K.

[JudyDunlow]

Eeeek. I'd stay away from debt CON-solidation. Use the Dave Ramsey debt snowball system and don't worry about saving a few dollars with interest rates here or there. The big thing to focus on is your income, motivation, and what sacrifices you are willing to make to get out of debt & stay out.