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    • asoe209
    • By asoe209 11th Oct 16, 9:48 AM
    • 316Posts
    • 166Thanks
    asoe209
    Advice on my debt please
    • #1
    • 11th Oct 16, 9:48 AM
    Advice on my debt please 11th Oct 16 at 9:48 AM
    Morning, just looking for some advice really as I seem to be at a sticking point in repaying my debts.


    A friend advised that I should look at getting a loan. but there are a couple of different factors involved.


    So the break down is,
    I owe a total of £16,252
    to over draft - £1450
    Online Retailer - £7950
    Credit Cards 0% - £2954
    Credit Card - 0% - £3898


    I'm paying about £510 a month on all.


    I take Home £1800 a month and I am about to take in a lodger that will pay 365 per month.


    All my other outgoings total approx £950 per month.


    I had a look a getting a loan for the full 16k but that is not likely, but I could get one to pay off the retailer as this I the most and the highest interest.


    This difficult bit is I need to also get a new car, this is due to work and the car allowance policy which I have put off for a year now but my current car is has been braking down a fair bit this year so its getting to the point where I need to change it soon any way.


    My salary is due to go up I would estimate in the next 4 months, if all goes to plan.


    so can any one give there suggestions on what may be the best solution?
Page 2
    • dktreesea
    • By dktreesea 11th Oct 16, 1:15 PM
    • 5,318 Posts
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    dktreesea
    You would probably increase your chances of getting a loan from Barclays if you stayed out of your overdraft.


    Could you maybe use your savings to pay off the overdraft, wait a month or so then apply for a loan from them? Personal loan rates are worth shopping around for. Our bank is offering 3.9% at the moment.
    • enthusiasticsaver
    • By enthusiasticsaver 11th Oct 16, 1:57 PM
    • 2,571 Posts
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    enthusiasticsaver
    The only loan I would consider is to get rid of that online retailer debt. 39% is horrific. Now you have over £1k in emergency fund I would put that £100 and all your lodger money towards debt repayments. That is £900+ per month to get rid of the debt so entirely doable in around 18-24 months providing you stick to budget, don't take any more debt on and get the online retailer debt moved to something more affordable. What did you use that for?

    Not sure what to suggest about the car except you cannot afford any more debt at the moment so until you get a payrise or get the debt more under control you should not be borrowing to pay for a new car.
    Debt and mortgage free and saving for early retirement
    • EssexHebridean
    • By EssexHebridean 11th Oct 16, 2:24 PM
    • 6,383 Posts
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    EssexHebridean
    [B]Statement of Affairs and Personal Balance Sheet

    Electricity............................. 50 - Over estimate, again a lot of these vary general put on £40 per month.
    Gas..................................... 40 - same with this its more in the region of 20-30PM Pre-payment meter then? Nasty things - can you request to change onto a standard meter? Have you checked that you're getting the best deal you can, regardless of the answer to the first question?
    Telephone (land line)................... 17.4 - Just the phone internet is free at the moment but this does seem over the odds Fairly standard for line rental unless you're in a position to pay upfront
    Mobile phone............................ 25 - Over estimate if it goes over average £21 pM Contract? Sim only? PAYG?
    TV Licence.............................. 37 - 3 monthly payments So this should show £12.12 per month, yes?
    Satellite/Cable TV...................... 22.5 - Cancelled down to freeview. cancelling the multiroom which is £10 towards this So there is now no cost here at all?
    Petrol/diesel........................... 70 - fluxgates depended on where I have to travel to £50 fills the tank does me about 350 - 400 Miles Read Martin's guide about driving economically and put it into practise religiously. Every little helps.
    Car Insurance........................... 33 - Renew next week shooping around at the moment Definitely do - again use Martin's guide on the main site.
    Car maintenance (including MOT)......... 100 - This is around what I have been paying on repairs and main. I count my savings towards these sorts of cost, not a separate cost. And this is some of your problems. You can't afford the luxury of savings when you have debts at 39% - I promise you that. You NEED to start budgeting for things like this monthly - else your situation is only going to get worse.
    Presents (birthday, Christmas etc)...... 30 - don't by gifts family does secret santa at a maximum of £30 So this isn't £30 per month, no? It's £30 per year?
    Emergency fund.......................... 100 - Counted this as my saving which is £1400
    The point of an SOA is it details what you actually spend, and therefore shows you what money you have, and where it goes.
    Current Account OD.............1450......40........0 - this is a Barclays OD and they charge a percentage per day the account is in OD. I don't know the percentage for it. Are you absolutely sure it's a percentage? If you go online and check your statements it should tell you what's being charged - it will also show you how much those charges come to in a month.
    Originally posted by asoe209
    Humour me here - but I'd like you to try something. Look at the latest statement for your hideous 39% finance debt - and write down how much interest it is adding on every month. Then log into your online banking and see what the monthly charges actually are for that overdraft. Write that figure down too. Then add the two together. Can you now see why we're saying you can't afford savings?

    You're double accounting at the moment - and that isn't helping. You need to account for every penny of what you have coming in, know where it's going and be able to hammer away at that debt. At the moment the books aren't balancing though and you don't have a clear grasp of what your expenditure actually is - that's when problems occur.
    MORTGAGE FREE 30/09/2016
    • Sanctioned Parts List
    • By Sanctioned Parts List 11th Oct 16, 3:34 PM
    • 294 Posts
    • 764 Thanks
    Sanctioned Parts List
    Hi asoe,

    To follow the excellent advice you've already received, just to note that if you're being charged £40pm on a £1450 overdraft, this is 2.76% non-compounded, or roughly equivalent to 33% APR.

    There's no way your savings are earning that interest - pay off the overdraft!

    I'd love to know which online retailer charges 39% - that's usury!

    • asoe209
    • By asoe209 11th Oct 16, 4:31 PM
    • 316 Posts
    • 166 Thanks
    asoe209
    Thank you all for your advise and comments its really been appreciated.


    Whats annoying is the debts were going down, but when I took this new job the extra travel has hit me a bit harder. which made me use the credit cards more.


    some have u have mentioned don't save. I did originally start the saving to pay things off in bigger chunks but also it was to cover this things that crop up like the car repairs, insurance etc.


    to be fair if I had not save those extra bits from the car allowance, I would have been screwed at this point.


    the retail account was used to buy bits for my home( fridge, freezer bed etc), when at the time I had a partner it was being paid jointly. when we split and she moved out it left me to cover all the rest on my own.


    Most are saying tackle the retail account. and work on the rest from there. but is that worth putting on a loan of just more trying to put every penny into it?


    from my point works just going to have to lump it in terms of a new car. the lodger money is going onto the retail account that was the original plan. and just try a do more preventative maintenance on the motor.
    • asoe209
    • By asoe209 11th Oct 16, 4:32 PM
    • 316 Posts
    • 166 Thanks
    asoe209
    My bank charges - 75p/day on up to £1,000, £1.50/day from £1,001 to £2,000 and £3/day on more than £2,000. New charges for breaching your limit. If this happens, Barclays will charge £5/day up to a maximum of £35/month
    • MrsTinks
    • By MrsTinks 11th Oct 16, 4:39 PM
    • 14,585 Posts
    • 22,067 Thanks
    MrsTinks
    My bank charges - 75p/day on up to £1,000, £1.50/day from £1,001 to £2,000 and £3/day on more than £2,000. New charges for breaching your limit. If this happens, Barclays will charge £5/day up to a maximum of £35/month
    Originally posted by asoe209
    Typically how much are your charges at the moment each month? That way we can reverse engineer like SPL has kindly done on a theoretical amount for you.
    DFW Nerd #025
    SPC member #561
    Sept 2016 - £10811 Oct £10166 to clear Cleared Since Sept 16:£645 6% repaid Declutter 25 items in November target: 0/25 Make £10 extra a day in November: £57/£150
    • MrsTinks
    • By MrsTinks 11th Oct 16, 4:43 PM
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    MrsTinks
    As for the online retailer thingy... are you utterly certain that you have the discipline to not take out any more credit? to close the accounts you currently have the 39% apr on? if so then look at if you can balance transfer to a lower apr card.

    You do need to be utterly utterly sure though that you won't be tempted to use other accounts again...

    I would hold out on the car for as long as you can right now... until they REALLY get shirty about it. Depending on how much they check up on you then you can fly under the radar for a significant period - but do get a decent breakdown/recovery plan
    DFW Nerd #025
    SPC member #561
    Sept 2016 - £10811 Oct £10166 to clear Cleared Since Sept 16:£645 6% repaid Declutter 25 items in November target: 0/25 Make £10 extra a day in November: £57/£150
    • EssexHebridean
    • By EssexHebridean 11th Oct 16, 8:36 PM
    • 6,383 Posts
    • 35,220 Thanks
    EssexHebridean
    My bank charges - 75p/day on up to £1,000, £1.50/day from £1,001 to £2,000 and £3/day on more than £2,000. New charges for breaching your limit. If this happens, Barclays will charge £5/day up to a maximum of £35/month
    Originally posted by asoe209
    So on a 30 day month you're being charged £45?
    MORTGAGE FREE 30/09/2016
    • Sanctioned Parts List
    • By Sanctioned Parts List 11th Oct 16, 9:44 PM
    • 294 Posts
    • 764 Thanks
    Sanctioned Parts List
    So on a 30 day month you're being charged £45?
    Originally posted by EssexHebridean
    Equals 37.3% APR assuming an average balance of £1450

    • EssexHebridean
    • By EssexHebridean 11th Oct 16, 9:47 PM
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    EssexHebridean
    So on a 30 day month you're being charged £45?
    Originally posted by EssexHebridean
    Equals 37.3% APR assuming an average balance of £1450
    Originally posted by Sanctioned Parts List
    If this is the case, I'd definitely say get rid of the overdraft using savings - not least as it's actually increasing month on month at the moment I suspect?
    MORTGAGE FREE 30/09/2016
    • bobcat2
    • By bobcat2 11th Oct 16, 10:16 PM
    • 37 Posts
    • 52 Thanks
    bobcat2
    If you have savings, I would pay the overdraft immediately if its charging interest, the overdraft would then be available as a genuine emergency fund if required. I would do something to tackle the 39% interest on the retail account as quickly as possible as that APR is horrendous. Is there any available credit on the credit cards at 0% than you can use to tackle some of this? In my opinion its important to get the interest rates down as low as possible so you can start making a dent in outstanding amount with your repayments.
    It doesn't make any financial sense to have savings if you are paying interest unless you will definitely not have access to any other funds in case of emergency.
    • EssexHebridean
    • By EssexHebridean 12th Oct 16, 9:29 AM
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    EssexHebridean
    At the very least pay £450 from your savings to your OD as a matter of urgency - today - as this will reduce the charges by £15 a month and mean your £40 a month you're currently paying again will start to make a dent - albeit a small one.

    Then contact the bank and ask them to change your OD limit to £1000 at the moment - that way you are still within an "agreed" level. You also need to ask them to put an absolute stop on the account so it can't go beyond this point, though. Once you've decided what to do about shifting the rest of your savings, you can make a decision on reducing it further to act as an emergency fund, but once you do that, you do need to commit to it actually being for genuine emergencies, not just stuff you haven't budgeted for.
    Last edited by EssexHebridean; 12-10-2016 at 9:32 AM.
    MORTGAGE FREE 30/09/2016
    • MEM62
    • By MEM62 12th Oct 16, 9:40 AM
    • 965 Posts
    • 634 Thanks
    MEM62
    I drive a 2005 vw polo, its got 56,000 on the clock

    I don't believe they want any thing driven older than 5 years.

    the car allowance works out at about £300 after tax
    Originally posted by asoe209
    Your employers' expectations on the type of car they are expecting you to drive in relation to the car allowance they are paying you is unrealistic. This is adding to your financial pressures. Either their expectations need to be lower or the car allowance considerably higher.
    • MrsTinks
    • By MrsTinks 12th Oct 16, 9:47 AM
    • 14,585 Posts
    • 22,067 Thanks
    MrsTinks
    Your employers' expectations on the type of car they are expecting you to drive in relation to the car allowance they are paying you is unrealistic. This is adding to your financial pressures. Either their expectations need to be lower or the car allowance considerably higher.
    Originally posted by MEM62
    Not really... New polo with £2k towards a deposit is about £188 per month - allow say £40 on top of that for insurance and it's perfectly reasonable. They haven't stipulated a Mercedes or Audi, A car under 5 years with a car allowance of £300 after tax is perfectly reasonable.

    Obviously there are also way cheaper options out there - I just picked a fairly mid market brand new car.
    DFW Nerd #025
    SPC member #561
    Sept 2016 - £10811 Oct £10166 to clear Cleared Since Sept 16:£645 6% repaid Declutter 25 items in November target: 0/25 Make £10 extra a day in November: £57/£150
    • sugarcube84
    • By sugarcube84 12th Oct 16, 10:38 AM
    • 488 Posts
    • 503 Thanks
    sugarcube84
    I think what really matters in terms of the car allowance is what does the policy stipulate. It seems at the minute that the OP is making an assumption of their employers expectations in regards to the car but does the policy state that the car must be a certain age and if it does say no older than 5 years (as an example) then how has the OP been managing to get away with a car that's 11 years old.


    I would certainly be putting off buying a new car, especially as it seems you have just spent a it of money on it and it has low mileage for the age, I have done half of that mileage in under 2 years in my car and my allowance works out around the same.


    On another note is none of the mileage you do able to be claimed as expenses?
    Target DFD January 2017- Only 2 payments to go!!!

    Amount Paid off 69.38%
    • MrsTinks
    • By MrsTinks 12th Oct 16, 11:01 AM
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    MrsTinks
    I think what really matters in terms of the car allowance is what does the policy stipulate. It seems at the minute that the OP is making an assumption of their employers expectations in regards to the car but does the policy state that the car must be a certain age and if it does say no older than 5 years (as an example) then how has the OP been managing to get away with a car that's 11 years old.


    I would certainly be putting off buying a new car, especially as it seems you have just spent a it of money on it and it has low mileage for the age, I have done half of that mileage in under 2 years in my car and my allowance works out around the same.


    On another note is none of the mileage you do able to be claimed as expenses?
    Originally posted by sugarcube84
    Employers can use some discretion - so most won't force employees to go out and buy a brand new car (and no-one is saying OP should) - however it sounds like they HAVE noticed and are pushing for it. The condition of the payment is often quite clear that there is a maximum age (so for my husbeast it's actually 3 years and a certain level of car - granted his allowance is pretty generous as a result) - should it be brought up that his car does NOT meet these conditions and on being asked to correct it then his company can withdraw the car allowance because it's not been used for what it was given.

    Should be said that no-one seemed to object when he had a 4 year old Audi A8, and the policy is 3 years... they will only start picking on it if it's viewed as an issue normally. IE being late to work repeatedly due to car problems or if travelling to client sites in say a Morris Ital. How strictly a policy is enforced will depend on the company.

    Ultimately it's not a base salary - it's an allowance provided to ensure the employee has an appropriate mode of transport to attend his job and possibly represent the company to clients.

    As for mileage - I agree this is low on a car of that age, but clearly that's not stopping it from having a lot of issues
    DFW Nerd #025
    SPC member #561
    Sept 2016 - £10811 Oct £10166 to clear Cleared Since Sept 16:£645 6% repaid Declutter 25 items in November target: 0/25 Make £10 extra a day in November: £57/£150
    • enthusiasticsaver
    • By enthusiasticsaver 12th Oct 16, 11:12 AM
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    enthusiasticsaver
    56000 is not a lot of mileage for a 11 year old car. Normally £300 would cover a less than 5 year old car in terms of a used car HP agreement or even a very basic p2p deal but in terms of your financial state this is not possible at the moment. As Mrs Tinks says I would keep quiet about it and see if you are pushed further especially as you have paid out quite a lot on repairs.
    Debt and mortgage free and saving for early retirement
    • EssexHebridean
    • By EssexHebridean 12th Oct 16, 11:44 AM
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    EssexHebridean
    I agree with Mrs T & ES on this one. Keep your current car immaculate, make sure that you have breakdown cover in place (although you should have it anyway, obviously) and keep your head down. Once you are back on your feet, and if your new salary comes off as planned, I would suggest you need to start setting ALL the car allowance to one side in a separate account as it's this which will then not only pay for the running of your current car, but will also start to save towards the next time you come to replace.

    Remember also you don't need to be looking at buying brand new, when you do replace. You want to be careful with anything in a registration that crosses over a year, though - ie my car is a 2007 registered 57 plate - Mr EH's however is a 2006 registered 55 - meaning his actually "appears" older than it in fact is. So in other words when you buy, ensure yours is true to its registration year if the age will be important down the line. (And for anyone who that doesn't matter to, a car that shows older than its actual year can be a bit of a bargain!)
    MORTGAGE FREE 30/09/2016
    • asoe209
    • By asoe209 13th Oct 16, 8:24 AM
    • 316 Posts
    • 166 Thanks
    asoe209
    Morning all sorry was not able to log on yesterday.


    Well in terms of the car, the policy state 5 years and has to be a 5 door, I did question that and my Director did say that the door number is not so much a problem.


    The position I am in is a trainee so im not up to the full salary for the job that I do yet, this will increase once I past my final exam. so at present the terms I moved on where staying on my previous departments pay.


    I believe they understand about the car as im not at full pay, and I have made it clear that until I am sorted and on full money I wont be getting a new car as I can afford it or justify it. but every now and again they do ask have you been looking etc.


    I do get mileage which is 10p per mile. Last year I I did claim the rest up to the 45p and got about £200. I never quite understood why it was so low as im sure the from state it was £800-£1000 but I believe it was only 20% of that that was returned.


    Yes I don't have any other money if I get rid of my saving I have no one that could loan in an emergency etc. this is why the saving have been important I know it don't make sence to save with bill to pay but I would be a bit more comfortable have something there just in case.


    I do use them when I can to put towards other pills like the OD I have reduced that over a number of months with it.


    I am due a bonus from work at the end of next month, the amount is always different but that will be going on something.


    I don't have enough credit on the card to use on the Retailer account.


    So its clear plan is to get rid of the retailer account 1st and reduce the OD.


    your advising not to get a loan to do the retailer or should I?


    I can start putting the lodger money to the retailer. but I think a lot of this is getting taken up by the interest now. of the 360 I paid last month 150 of that is on the balance.


    i'm thinking the loan will just give a steady payment that can be budgeted, but at the same time I don't really want a loan over my head.
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