consolidation loan or continue with DMP

[calshan]

Hello,

Just a bit stuck really on what to do for the best.

I am currently on a DMP to the tune of £18,300 remaining, with an estimate of it being paid off in 5 years. I have already paid £10,500 off up to this point. I have been advised by my bank to take out a consolidation loan to cover the debts so they are all under one payment with the bank, which will improve my credit rating eventually as the other creditiors will be paid off. Two questions on this,

1) Is this a sensible thing to do?

2) would the creditors be likely to accept an offer of 80% of the monies outstanding, which would allow me to borrow a lesser amount on the consolidation loan.

 

On a monthly basis, a consolidation loan saves me £40 compared to my current dmp payment, i am aware that over time, i pay a little more back than sticking on the DMP with Payplan.

Bankruptcy is not an option because of my job, which offers a great pension, i rent, do not have any assets as such!

 

Any advice or other's experiences appreciated

Calshan

[sillygirl1]

The more sensible option would be to cut some of the payments to your creditors to do full and finals with the smaller ones, then you would break the cycle and not have to go down the consolidation route - it isn't advisable in the current climate anyway.

[calshan]

I have considered this previously and the issue is that i don't even have the cash in order make full and final claims to even the smaller ones! Payplan haven't helped massively on this and things are getting tighter and tighter!!!

[calshan]

have you any advice on how to do this Sillygirl? It is certainly an option to explore, thanks for your advice!

[sillygirl1]

I've done it recently with a lot of success, but they were recent debts and I knew my grround - thanks to info gleaned off this site. I will send you a PM on how it worked for me. It does involve some letter writing and record keeping but in the end I felt it was worth it as all Payplan and the CCSS wanted from me was to continue paying pro rata when I felt some people were taking liberties.

 

Its not illegal to do it the way I did and it isn't debt avoidance which some sites promote, you don't need to ask for CCAs etc as you have already been paying them.

[calshan]

:-)that would be fantastic, i have read quite a few postings on this site about various different things but unsure how this would affect my dmp and would it provoke the creditors into demanding immediate repayment!

[sillygirl1]

I've sent you a private message (PM), check your inbox and PM me back when you've read what I did. I'm down to my last payment on a debt which otherwise would have taken 3 years to pay by doing it the Payplan way.

[diddydicky]

consolidation and especially with a saving of ust 40 quid a month is a definate no no

 

snowballing is a good idea but i have to say that cca requests should be part of the strategy

 

business is business