This for me will be quite an achievement - a final payment on a consolidation loan!
Until 1999 I had taken out the odd hire-purchase and more often than not would paid it off before the required time. But in October of 1999 I took out the first, of what would be five consecutive consolidation loans, with those really nice people at the Midlands Bank (now known as HSBC). The loan was for £3,500.00 and was to consolidate some credit card debt I had built up - how simple it all started off as, now just shy of a decade later I will be making my final payment on my final consolidation loan.
My history looks like this:
1999 Oct. £3,500 @ 14.9% £4,304.52 (£119.57 x36)
2001 Oct. £7,000 @ 11.9% £8,285.62 (£230.16 x36)
2003 Nov. £4,750 @ 14.9% £5,292.57 (£294.04 x18)
2005 Apr. £7,000 @ 11.9% £8,067.50 (£268.92 x30)
2006 Oct. £8,600 @ 6.9% £9,211.85 (£383.83 x24)
I feel sick when I look at the amounts of money I have wasted. Here is the down payment on a house or a nice new car plus a holiday. The "what if" possibilities are endless but you get the drift.
All the loans were financed by those wonderful people at the HSBC Bank, who must really love me and yet they don't even send me a Christmas card! As you can imagine they are always ready to offer me more credit in the form of another loan, as I have never missed a loan payment (ever). Even the Halifax had a loan offer of £5,000 on my file last time I was visiting a branch making a payment on a card. That's a guaranteed loan offer and just a few weeks ago too. If this is a Credit Crunch why is there still so much credit being offered? But I digress.
Unless you are strong and really bloody minded about clearing your debts, don't take out a consolidation loan. If you have already done so - then you really should cut up your credit cards and get rid of any overdrafts you have. Then set up a direct debt payment for your consolidation loan, only buy with cash, learn the craft of frugal living and save, save, save. You will thank yourself in the long run!!