Struggling with debt? Ask a debt adviser a question

StepChange_Rachael · 6 April 2017 at 10:19AM

Hi

Thanks for your post and welcome to the forum.

I know it can be daunting when faced with having to tackle debt that has built up over time, especially if your husband is unaware but there is certainly a way forward for you.

From what you’ve mentioned I’m assuming the current repayments are becoming unaffordable and I generally wouldn’t suggest consolidation loans or further borrowing as they rarely help the situation.

The interest rates and repayments on personal loans can be high. However, this is an option you can consider and is completely up to you.

If you are or aren’t able to go down the personal loan route I’d still suggest speaking with a debt advisory service like ourselves at StepChange for free and impartial debt advice. This way you can explore all your options.

If you’d like to contact us you can find our details here.

Thanks
Rachael

hollyhenry wrote: »

Hi - not quite sure how to get out of this. By just silly overspending over a number of years, I have run up credit card debt of over £26k. I am employed (I have a good, secure job) and with my husband, have mortgages on 3 properties. I have tried to get a personal loan online and on the phone from my bank to consolidate the debt but have been told I would be declined. I have an appointment for a face to face meeting on Monday. I really don't want my husband to know about this as it will add to his stress. If I can get the personal loan at a fairly low rate on Monday, I will just pay it off over a few years - I can afford quite high monthly repayments and there won't be a problem. I am earning more now than I did (funnily enough, I don't spend as much now though!) However, if I don't, I just don't know what I will do.

StepChange_Rachael · 6 April 2017 at 10:46AM

Hi

Welcome to the forum and thanks for getting in contact.

I’m sorry to hear that the debt is causing you stress. I appreciate debt can be very worrying.
Credit files are a strange one, so many different things can impact your credit file and they often fluctuate.

Really they are there for creditors to weigh up the risk in lending to an individual.

A person with no debt is likely to have a ‘worse’ credit score as there is nothing to work out the risk factor, also credit scores vary depending on which credit reference agency you use. There are three in the UK.

Most people aren’t aware of their credit score and really are only useful if you’re planning on further borrowing, in particular applying for a mortgage.

If you’re able to keep up with the regular payments to your household bills and general living costs, plus non priority creditors and can pay money on top to reduce the total this is the best scenario.

I wouldn’t suggest further borrowing unless you’re able to maintain the minimum payments and the interest rate is lower than your current rate. As further borrowing such as consolidation loans often have high interest rates and can cause further problems.

If you’re unable to meet the minimum payments or are finding you’re getting into further debt then I’d suggest speaking with a free money advisory service to look into further into the options available to you.

You can find our contact details here at StepChange.

Hope this helps.
Rachael

woowoo22 wrote: »

Hi,

I hope I have done this correctly and that someone can help me. I have recently run my credit score through Noodle and am really upset/shocked that in recent years it has dropped quite considerably.

I have a large amount of credit card debt - 10K to be precise, of which is split 70/30 across two cards - Virgin (3K) 0% and Barclaycard (7K) ??%. I have made a bit of a dent in the debt on the Virgin card, but can never seem to get on top of the Barclaycard due to the interest I am paying. I am too nervous to apply for an additional credit card as I don't think I will get one with a substantial limit to be able to transfer and close the Barclaycard. I'm really at a loss as to what to do and am making myself feel ill with the thought of the debt.

I have my own mortgage and I have a loan which I got to buy a car. Am I best to approach the loan company and see if they will extend my current loan so I can pay at least some of the credit card off, or borrow on my mortgage (am loathe to do this to be honest). In an ideal world, I'd love to have just my mortgage and one other large bill to pay per month, but am a long way off from this I am aware.

Any advise would be great - thanks

PowerLifting · 7 April 2017 at 5:51AM

Hi

I am currently looking at clearing my overdraft debt. I got into this debt because of lending money to family, I'm to embarrassed to ask for it back and they would be worse off than I would if I didn't ask for it back and paying childcare so both me and my partner can work, childcare payments won't be an issue in Jan next year and I'd use this "extra" cash to pay my debt of quicker but in the mean time I need to budget plus shift the current overdraft debt so I don't miss payments.

I seen the Money Transfers
Shift cash from a card to your bank account at 0% page on this site but I'm confused as to will this work for putting my overdraft debt on a current account to another card where I can pay back in monthly installments over a 41 month period or if this only works for just credit cards.

Look forward to hearing back!

Regards

Former_StepChange_Richard · 7 April 2017 at 9:24AM

Hi there,

Thanks for getting in touch and welcome to the forum.

Shifting cash and using money transfers can offer a short term relief from charges or interest, but ultimately you'll need to make a budget and work out how much you can afford to pay back to your debts in order to pay them off. Best to start budgeting sooner rather than later to avoid the risk of the debts getting higher.

You can create a budget with us using our Debt Remedy tool in your own time. Once you have completed your budget, the Debt Remedy tool will suggest the best plan that you could use to help you deal with your debts. You don't have to take this advice if you don't want to, but we'll be happy to support you if you choose to go ahead.

I hope this helps.

Richard

PowerLifting wrote: »

Hi

I am currently looking at clearing my overdraft debt. I got into this debt because of lending money to family, I'm to embarrassed to ask for it back and they would be worse off than I would if I didn't ask for it back and paying childcare so both me and my partner can work, childcare payments won't be an issue in Jan next year and I'd use this "extra" cash to pay my debt of quicker but in the mean time I need to budget plus shift the current overdraft debt so I don't miss payments.

I seen the Money Transfers
Shift cash from a card to your bank account at 0% page on this site but I'm confused as to will this work for putting my overdraft debt on a current account to another card where I can pay back in monthly installments over a 41 month period or if this only works for just credit cards.

Look forward to hearing back!

Regards

PowerLifting · 7 April 2017 at 11:12AM

Hi Richard

Thanks for getting back to me. I will use the debt remdy to see what plan is best to clear my debt.

However I am still curious as to is Money Transfers Shift cash from a card to your bank account at 0% still an option for switching the debt of my overdraft to a credit card and paying it off monthly?

Regards

Aarron

Former_StepChange_Richard · 7 April 2017 at 3:56PM

Hi Aarron

The idea behind a 0% money transfer is that it allows you to use the credit from a credit card and use it pay into a a bank account to clear an overdraft, for example. There is a section on the MSE site about this that explains in much more detail: here.

You'll read this in the article, but please be aware if you decide use this option, pay careful attention to the terms and conditions of the credit card. You must pay at least the minimum monthly payment amount otherwise you'll be hit with penalites and there's the chance the card provider would withdraw the 0% rate.

Let us know if you need anything else,

Richard.

PowerLifting wrote: »

Hi Richard

Thanks for getting back to me. I will use the debt remdy to see what plan is best to clear my debt.

However I am still curious as to is Money Transfers Shift cash from a card to your bank account at 0% still an option for switching the debt of my overdraft to a credit card and paying it off monthly?

Regards

Aarron

james2018_2 · 8 April 2017 at 7:07PM

I have around circa £20k owing on a loan and c cards. The interest is barely coming down as I can only make the minimum payments so it's going on and on so to speak.

I can get a loan to consolidate them all and effectively be debt free in 5 years.

Is this the best course of action or do I keep going and paying these off?

Thanks!

daylad · 8 April 2017 at 9:15PM

I have a car loan that has 4 1/2 years to go I pay £140 a month I also have £18k cc debt I want to put it into loan I have 1 quote for the £18k at £240 a month over 7 years or another one for car loan and cc debt in one at £375 a month over 7 years which should I go for? Thanks

StepChange_Rachael · 10 April 2017 at 8:27AM

Hi James

Welcome to the forum and thanks for your post.

Where you can maintain the minimum payments without struggling this is a good situation to be in. However, I know it can be frustrating when the debt total doesn’t seem to be reducing.

I wouldn’t recommend consolidation loans in general as they often cause people to struggle further with their finances due to consolidation loans often having high interest rates.

However, If you’re managing to make the minimum payments without struggling with your priority living costs, and the main issue is the interest rate, then transferring the debt could be an option. This will reduce the time frame to pay the debt back.

I’d suggest reading any small print and check the agreement if you do decide to look into consolidating the debt.

However, If you find you’re struggling with your household bills and general living expenses because of the debt then other debt solutions may be an option.

If this is the case then you can find a link to our online Debt Remedy tool here for free and impartial advice.

Thanks
Rachael

james2018 wrote: »

I have around circa £20k owing on a loan and c cards. The interest is barely coming down as I can only make the minimum payments so it's going on and on so to speak.

I can get a loan to consolidate them all and effectively be debt free in 5 years.

Is this the best course of action or do I keep going and paying these off?

Thanks!

StepChange_Rachael · 10 April 2017 at 8:42AM

Hi

Thanks for getting in contact.

Without knowing your full financial situation it’d be difficult to say which the better option for you is. It would depend on what is going to be affordable and what your current interest rates are.

I’d suggest first checking what is going to be affordable as the main priority and then which is going to have the lowest interest repayments.

As debt advisors we specialise in debt solutions where the minimum payments to creditors aren’t affordable. If you feel this is the case and you’re struggling to meet the contractual payments then you can look at alternative options through our online Debt Remedy tool.

Thanks
Rachael

daylad wrote: »

I have a car loan that has 4 1/2 years to go I pay £140 a month I also have £18k cc debt I want to put it into loan I have 1 quote for the £18k at £240 a month over 7 years or another one for car loan and cc debt in one at £375 a month over 7 years which should I go for? Thanks

Struggling with debt? Ask a debt adviser a question

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free