Your main problem here is what is going to be called debt to income ration. This is the amount of debt you have compared to your houshold income.

At present with a debt of around £19,000 and an income of around 34,000 you are servicing a debt to income ratio of nearly 59% and this is most likely going to be in excess of most lenders criteria which will mean a decline. A lender will view a loan of above 50% DTI as unaffordable as it means that the majority of your income per annum has to be used to service the debt and this is not a position that the lenders want to put themselves into as they feel it puts their investment in you at risk.

I do understand that you may not want to approach a debt management company regarding this and I applaud you for this as it is step too often taken and quite often does not solve the problem as many of these companies will line their pockets before they line your creditors pockets. Also be very careful about companies offering IVA's. These are serious debt problem solutions akin to a bankruptcy and while you have hinted that you are starting to have financial problem you have not mentioned that you are at financial crisis which is where I would feel that an IVA has its place. If you take any of these solutions your credit profile will immediately be ruined for several years

Personally I would try and over pay on the debt by what ever amount you can. Debt is not an easy problem and it is a long and slow process to recover from it but it can be done and if you have not missed any payments yet I would urge you to consider this route before any other. By overpaying as much as possible on your debt you effectively reduce your debt balance with the overpayment and therefore with a reduced balance you reduce any potential interest that can be charged on that balance. It won't make a major difference at first but if you can manage even an extra £100 per month this will soon start to make an impact. it will save you an extra £10 maybe but then if you use this additinal £10 towards the debt you chip away just that bit more again and with the money saved you can then pay off more debt.

Looking at your incomes and assuming each person earns about £17,000 this will give you a monthly income between you of around £2,300. If you take out your debt repayment of £900 and rent and other expenses of £1000 then this still leaves you the guts of £400 disposable income. If you can just move £100 towards paying off the highest interest rate debts such as the store cards (often around 34% APR) then you will see the balance come down quickly and the interest reducing. Don't pay off minimum amounts as this will lead to the longest debt, pay what you can and reduce the balance and the interest payable and the debt will clear quickly, then move onto the next highest interest rate debt and start again....it will be a long process but after just a short time youy will start to see positive results. You can do this on your own and with luck your credit record will remain intact....if you use any other method then your credit record will be destroyed by creditors placing defaults against your debts in the debt management programs.

You could also seek help from the debt charity although I am not sure if they can help at this point as you do not yet have missed payments or difficulties, but if the time comes the charities listed below are absolutely free of charge and will work in much the same way as a regular debt management company but without the profit for the company.

National Debtline www.nationaldebtline.co.uk

Consumer Creditr Counselling Service www.nationaldebtline.co.uk

Citizens Advice www.citizensadvice.org.uk

Good Luck

Oh, and I would say not to be tempted into getting a loan for any thing less than your current debt. You will just end up with the loan plus creditor bills not paid off...these will creep up on you again!

You could also look at transferring some cards on to a 0% credit card. Comparison sites will tell you which is the best, as will Experian.

James,

Maybe try Experian again? We log frequently, and use it as a guide to where we are at with credit scoring and found it useful recently when seeking a balance transfer on 0%.

As we are in a similar situation to you (Number crunching is keeping me up at this hour!) I can tell you the avenues we have gone down. We have a large household outgoing of £1900 for rent, utility bills, insurances,food etc and creditors around £1000. Income is reduced as I am about to return to work after maternity leave, and although returning full time, childcare is costing £700 per month.

What we have found is every loan you apply for or credit card etc, your credit score if affected. Even if that loan is refused. In order to get a loan you have to have an good/excellent score. Experian will tell you which companies are likely to accept you and how much they are willing to lend you based on your current score and credit behavior. My advice would be, look at the score before applying for any thing. Click the 'how to improve my score' and read on ways you can increase your current score. You should then get a good idea on how long it may take before you would be accepted for a loan, and then be guided by when is best to do this.

Hope that makes sense?! As I said, I am up up very late and not as articulate as I would be in day light!

Hi Lou,

I was once registered on Experian or something similar.. but the amount of spare money it was saying I had was nonsense, well i thought so anyway.

Obviously its not that simple these days to go.... here Santander give me a £19,000 or maybe even a £13,000 loan, I can pay it no problems.

We do not spend a lot of money each month.

All our Direct Debits (Rent, Virgin, Mobiles, Electric, Home Insurance) all comes to around £500.

we must then spend around £500 on Transport and Food each month

with close to £1000 going to the creditors mentioned in my main post.

Hi,

Have you tried logging on to Experian or similar, seeing your credit score and looking to see if your available credit is enough to do a loan consolidation?

We are in a very similar position to you. We are looking to move into in laws for a period of six months. Have worked out we can increase our disposable income by an extra £1,500 (still paying in- laws rent) and pay off quite a bit of our debt.

Hi,

I am new here, I was wondering if someone could give me some advice regarding debt.

Currently me and my wife have 7 creditors. (loans, credit cards and store cards + overdraft) *all included in these 7 debts

I would estimate this would be around a total of £19,000 in debt.

Now we are not on a high income, probably about £34k a year between us both.

But at the minute we are paying about £950 a month to these creditors, we never miss any payments, but as I am sure you all know store cards never seem to go away, no matter how much you pay to them, the balance is always around the same as every couple of months you buy an item or 2 on them. where as if we where paying out less a month we could just take the cash direct from our bank to pay the the odd bit of clothing or stuff about the house.

Can anyone give some advice on what we should do?

We do not want to contact a debt management company and get our minimum payments lowered etc, What my preference would be is getting a loan for as close to the £19,000 mark as possible and paying that over a 3-5 year period. This would save as quiet a bit each month. for example on a loan calculator with Santander it says over 3 years we could get £19,000 and pay it at £600 a month.

What do others advise?

We are not home owners and we have have basic outgoings (small rent and small other bills) (non-smokers/non-drinkers) (no offence meant :))

Regards
J