Have you used debt consolidation?

[pyrocam]

I am pondering it, but with the vast array of companies to choose one how do I know who is going send the two maori boys to come break my legs and who is going to give me a phone call should my payments go overdue.

I just wondered who else was using it and perhaps what kind of interest rate your getting and if it was worth it.

Any advice would be appreciated
Cheers

[Lou Girardin]

Consumer magazine has done a feature on it. Basically, it's a good idea. Just watch the bottom line. In their example the interest rate charged by GE finance was 32% on a secured loan!
They said that Credit Unions offer good deals, even Banks were better than GE.
It pays to cut up your credit cards while you clear the loan though.

[Postie]

before you go to any finance companys and get arse raped by their fees, try your bank. They will have a much better interest rate and you will have more controll over you repayments.

[Winston001]

before you go to any finance companys and get arse raped by their fees, try your bank. They will have a much better interest rate and you will have more controll over you repayments.

Absolutely right. I see people pay a $3000 fee to a debt consolidator who is nothing more than a mortgage broker. Money down the drain.

Go and see your bank to put your loans together, and get some budgeting advice if you think it will help.

[Finn]

Hmmm, borrowing money to pay off debt. It no make sence unless through consolidation you are paying LESS interest. Any interest saving can be offset against early termination (penalties) on other debt. This doesn't mean that the payments are less cause it could be over a longer period.

Do not live beyond your means young man.

[James Deuce]

Cut those credit cards up, unless you are a student. Most banks offer student credit cards at interest rates the rest of us can only dream of. Try to swing using a student credit card for debt consolidation and THEN do nothing with your life but pay it off. You'll be surprised what you can achieve in six months if you suffer a little.

[chickenfunkstar]

I just got offered a 60 month loan at 23% from PRF. Errr thanks but no thanks.

What interest rates are your debts currently accruing?

[ManDownUnder]

I am pondering it, but with the vast array of companies to choose one how do I know who is going send the two maori boys to come break my legs and who is going to give me a phone call should my payments go overdue.

I just wondered who else was using it and perhaps what kind of intrest rate your getting and if it was worth it.

any advice would be appreciated
cheers

two aspects to it...

1) Money management. If you can't manage money, debt consolidaytion benefits will be a temporary blip on the radar while you rack up other (non consolidated) debt.
2) If you end up paying less interest on the consolidated load... it's a great idea.

Talk to a bank about it, not the fancy finance houses. If the bank turns you down then you have an issue (not insurmountable) but it is a warning sign.

Get the debt, put it into a fixed term loan, pay it off per the schedule and avoid other debt in the meantime. Here's the simple rule - if you can't pay cash for it, you can't get it.

When the debt is cleared... then money management should kick in and you'll be fine.

If you're stuck for a consolidation loan (i.e. the only one(s) available involve a sexual act of an unsavory nature), just line your debts up and pick them off one at a time.

Only one rule here - start with the highest interest rate - no matter how large or small the amount - clear it, then shut the credit line down (i.e. cut the card up - whatever).

Then... repeat rule one till you're in the black. I possibly took you a while to get into debt - it might take a while to get out. No worries... chart it... do whatever you need to so you can see progress week to week...

Happy to help offline if wanted/needed

[Flyingpony]

MDU has good advise, but also watch out for early termination fees of your existing debts - read the fine print. It may turn out to be cheaper to just pay them off than terminate/consolidate it.

Start with the highest interest rate / over due penalty ones first. The ones that cost the most.

Go to banks for a personal loan/over draft.

Next time you're debt free, don't chew off more than you can pay in cash or if you need finance, then request it as part of the sale at no extra cost to you, that the finance will cost you nothing for the 3-6 months you'll need to fully repay it. If they don't come to the party, then walk away. Obviously you can't also ask for a cash sale discount.

[madboy]

I've used debt consolidation a couple of times. I can't save money to save myself (no pun intended), but put a debt repayment in front of me every week/fortnight/month and I'll never miss a payment.

While strictly speaking you should consolidate to reduce interest costs (as discussed at length above), sometimes you also consolidate to lower repayments, i.e. improve cashflow. I've got a friend in that exact situation - her relationship went south, he left her with the fixed term tenancy on a flash house, plus supposed "shared" debt (in her name - dumbass). She either had to earn $200/wk more or consolidate her debt over 5 years. The latter option may cost her more in the long-run, but it stops her from going bankrupt.

Banks are around 16-17% unsecured I think on a personal loan. If you have discipline, get a low interest credit card. I have a Kiwibank mastercard that is 12.9%. Treat it like a loan with regular instalments and it's cheaper than any finance company. Treat it like revolving credit and you're f***ed.

Personally I'm lucky, I have a mortgage. Even the floating rate is under 10% if I decide to buy new stuff I can't afford with cash... like the new car I soooooooooooo need.

[Virago]

The obvious choice in Home Mortgage - interest below 10%. If you have a Home Loan, is there room to add on to it?

[Colapop]

I have nothing further to add than to say "I did it (with the bank)" And the only thing I did differently was to chuck a little bit extra into it each month (paid monthly - Yay!!) to knock it down quicker. We've still got a way to go but now we're sitting a loy prettier than we were.

[placidfemme]

before you go to any finance companys and get arse raped by their fees, try your bank. They will have a much better interest rate and you will have more controll over you repayments.

Agreed.... Use your bank first... then as a last resort use a finance co...

Sam and I consolodated our debts about a year ago, and through the finance co we would have paid back over $9000 in interest and through the bank only $3000.

I don't know what the rates are or anything... but yah

[Troll]

hide your assets, move everything into a trust and declare yourself bankrupt

[Waylander]

GE finance were gonna sting me with 20-25% for a %7,800 loan. Stay away from them. ASB is fucking picky aswell as ANZ, BNZ and Credit union.

Talking to Westpac this weekend.

[NinjaBoy]

before you go to any finance companys and get arse raped by their fees, try your bank. They will have a much better interest rate and you will have more controll over you repayments.

generally you're find banks can do the same thing and are willing to talk you through the pros and cons despite missing out on the more profitable credit card rates.

[cowboyz]

You can manage your way out of debt by changing your views on money. There are a couple of ways but the most effective is if you get paid weekly then pretend you get paid every 8 days. For instance. you get paid on wed this week and you work out all your bills and pay them first. work out a little money for yourself and set a firm budget. Next week money will go into your account on wed but ignore it... payday is not till thursday this week. then pay all your bills and take your spending money. the following week although money will go into your accoutn on wed you dont get paid till friday. and so on. Set a realisitic budget and still to it. Use cash for everything. Get used to the idea that there is money in you account that you cant/wont use. After 7 weeks you will have an entire paycheck that is "free" money. It may seem wise to slap this on one of your bills but don't. Get used to having money in your account. Wait till you have a buffer of a few hundred dollars and then call that your zero mark. Anything that acculmlates over the buffer mark then put that on your debts. Do not spend that buffer money unless you find yourself in a position that you HAVE to. ABSOULTELY HAVE TO. NO WAY AT ALL YOU GET AROUND IT. You will find after a while it is not hard to go a couple of days a week with no money and the benfit of getting out of the pattern of spending all you earn will be a valuable lesson.