Credit/Loan advice?

[MsDG]

Its the old classic line... "I have this mate". However, foolishly she has got herself into debt. Its not that she can't pay it or anything... its just she is at her limit of monthly payments.

She has realised that the debt is on credit cards etc, so she is paying massive amounts of interest. Obviously it would be better for her to pay off the credit cards and get a low interest loan.

However, the problem is that she can't get a low interest loan. They are either refusing (because she is maxed out on credit) or they are offering her the low... but at stupid interest rates (14-16%).

It must be possible to get a low interest loan. She is going to pay off the credit cards immediately with the loan, so its not as if she intends to increase her credit... she actually trying to get it down!

Any tips would be very appriciated.

ta

P.s.
She is looking to get a loan for £8 - £10k (and she doesn't own a house)

[hn120]

Hi Dirtygirl!

Have you checked out moneysavingexpert.co.uk? There is some great advice on how to try to manage all this debt. I've found that sometimes you may be able to get a loan from the bank you bank with even if you have been refused by other lenders. She could try this.

The other option is to transfer balances on to credit cards with lowere APR's. If she can not get any further CC's then may be ask a family member to apply?

I hope this helps, though, I'm sure you will find more options on the moneysaving website!

[Andy Poobar]

The problem that she is going o have is that if she is asking for loads of loans and getting refused, each one is going against her credit rating to say this and making her credit score a lot worse. This means that the chances of getting a decent loan at a decent rate are getting slim each time.

[Crags]

Yep that's quite true... she could go into somewhere like Alliance and Leicester, explain her situation with proof of cards / earnings etc, and explain that she wants the loan for consolidation and they may take this into account when assessing her credit record. We've just done exactly the same, taken out a Natwest staff loan (the missus works there part time) and consolidated everything.

Worth a shot.

[geeWcee]

Firstly check out www.fool.co.uk for the best user friendly financial advice out there.
Usually the only people willing to bail you out of a situation like this is your own bank. but only if you guarantee that the new loan will pay off existing credit. Book an appointment with your manager and tell him exactly what you plan to do with the loan.
I've been in the same situation (thankfully years ago now) and that is how I managed it. In fact I never saw a penny of the loan money as my bank paid of the other loans directly before I got my hands on it. Its definately worth a try.
Failing that, there are loads of cheap personal loans knocking about out there at the moment, and you are bound to find one on the fool.co.uk website.
Good luck for your 'mate'.