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  • FIRST POST
    • zippygeorgeandben
    • By zippygeorgeandben 3rd Dec 16, 11:11 PM
    • 709Posts
    • 885Thanks
    zippygeorgeandben
    Unsure whether to consolidate - please advise
    • #1
    • 3rd Dec 16, 11:11 PM
    Unsure whether to consolidate - please advise 3rd Dec 16 at 11:11 PM
    Hello everyone,
    First of all, I can't believe I still remembered my username and password. It's quite a while since I've logged into MSE!
    Anyway, here are the facts.
    I currently have three debts I am paying off
    1) £5727.54 loan(started at £11k)with Zopa @ 4.8% - I pay £230pm
    2) £7568.74 loan(started at £12k in 07/2014)with Tesco @ 4% - I pay £222.61pm
    3) £4211.19 credit card with Virgin Money @ 0% until June 2017 - I pay £200pm (which is more than the £50pm they ask for)
    Total debt equals £17,507.47.
    Total monthly payments are £653pm

    I wish to reduce my monthly direct debit outgoings to give me more flexibility for stuff I want to buy.
    After having a brief search, Sainsbury's have a loan for £18k (so this covers all the debts written above) @3.1% which would mean me paying £323.89pm.
    TSB have a loan for £18k @3.5% which is £328pm. I'd be paying £1621 in interest for this deal.
    Both these loan repayments per month are roughly £330 less than I currently pay off per month at the moment (which as I've said above, are £653pm)

    I can't seem to find the wood for the trees here. What would you do?
    Would you just continue to pay the three original debts off? I can afford these repayments (just) but it doesn't give me lots of flexibility.
    Or would you consolidate all three debts, pay them off, and take out a new 5 year loan where the monthly payments would be reduced by over £300?
    Or is there another option I should consider?
    Thanks for reading,
    Ben
Page 5
    • zippygeorgeandben
    • By zippygeorgeandben 16th Sep 17, 5:47 PM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    Thanks Verbatim for taking the time to post.
    Considering using the remaining £5,000 to perhaps pay off either the Sainsburys or putting towards my Summer 18 holiday.
    Last edited by zippygeorgeandben; 01-10-2017 at 2:49 PM. Reason: deleting irrelevant information
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • enthusiasticsaver
    • By enthusiasticsaver 16th Sep 17, 10:50 PM
    • 4,661 Posts
    • 8,820 Thanks
    enthusiasticsaver
    I have just read of your good fortune and agree that paying off your interest bearing debts is definitely a good thing to do.

    My suggestion would be you think hard about your long term goals. How old are you, what is yours and your partners pension situation and do you have a decent emergency fund?

    I do agree that if you live in the London area you are definitely disadvantaged in buying property due to the excruciatingly expensive house prices and you would need a much larger lump sum before being able to consider buying a property. I would suggest that having paid down the interest charging debts and as your sister is not in a hurry for her money and the sainsburys debt is at 0% that you use the monthly amount you were paying to your debt to put into a regular saver (check out Nationwide flex saver which was paying 5% pa). Another option is to look at your pensions and see if it is worth paying more monthly to these especially if you are HR tax payers.
    4 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • zippygeorgeandben
    • By zippygeorgeandben 17th Sep 17, 12:40 AM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    Hey enthusiasticsaver - hope you are ok.
    I'm 38 and a teacher. I've paid into the TPS for 8 years now with no break. My partner works for civil service but has only worked for them for 9 months so not much pension. Neither of us has an emergency fund. We could look into moving somewhere else for a lot less money. My salary would take a bit of a knock (as I wouldn't get the London weighting) but still be classed as a decent salary.
    Yes you're right about the monthly saving but I calculated today that if I throw £700 at the debt each month (which is just a little above what I paid monthly in September last year, I would be debt free by July 2018. That is a real incentive for me. End of school year = 6 week holiday = debt free!
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • Tarambor
    • By Tarambor 17th Sep 17, 1:45 AM
    • 1,571 Posts
    • 1,075 Thanks
    Tarambor
    Hey enthusiasticsaver - hope you are ok.
    I'm 38 and a teacher. I've paid into the TPS for 8 years now with no break. My partner works for civil service but has only worked for them for 9 months so not much pension. Neither of us has an emergency fund. We could look into moving somewhere else for a lot less money. My salary would take a bit of a knock (as I wouldn't get the London weighting) but still be classed as a decent salary.
    Originally posted by zippygeorgeandben
    You could buy some extremely nice houses where I live on a teachers salary as in 4 bed detached ones with front and rear garden. London weighting doesn't come close to making up for the difference in housing costs compared to the rest of the UK.
    • Verbatim
    • By Verbatim 17th Sep 17, 8:48 AM
    • 4,513 Posts
    • 13,218 Thanks
    Verbatim
    I live in N London and know how high the property prices are.
    As a ftbuyer would you get govt help with help to buy? I think you only have to find 5% of the price for the deposit and have to be under 40 and buy a new build but you'd qualify on the enough income to afford the mortgage criterion I guess.
    CCs @0% £24k Dec 05 £19,621.41 Au £13400 S 12600 Oct £11,981 £9481 £7500 Nov £7250 D £7100 Jan 6950 F £5800 Mar£5400 May £4830 June £4660 July £4460 Aug £3200, S £900, £0 18/9/07 DFW Nerd 042
    • zippygeorgeandben
    • By zippygeorgeandben 17th Sep 17, 11:09 AM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    You could buy some extremely nice houses where I live on a teachers salary as in 4 bed detached ones with front and rear garden. London weighting doesn't come close to making up for the difference in housing costs compared to the rest of the UK.
    Originally posted by Tarambor
    Hi Tarambor hope you are having a lovely Sunday. Where do you live can i ask? Any kind of garden would be lovely! I have to make do with window boxes at the moment!
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • zippygeorgeandben
    • By zippygeorgeandben 17th Sep 17, 11:25 AM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    I live in N London and know how high the property prices are.
    As a ftbuyer would you get govt help with help to buy? I think you only have to find 5% of the price for the deposit and have to be under 40 and buy a new build but you'd qualify on the enough income to afford the mortgage criterion I guess.
    Originally posted by Verbatim
    Hi Verbatim. Hope you are ok. Yup, they are high aren't they. We've looked into HTB schemes but even then, and we aren't greedy at all, they are just too high. We aren't looking for a 3 bed townhouse.
    Last edited by zippygeorgeandben; 01-10-2017 at 2:50 PM. Reason: deleting unrelated info
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • zippygeorgeandben
    • By zippygeorgeandben 24th Sep 17, 11:34 PM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    Hello everyone,
    I've now paid off the ZOPA and TESCO loans, leaving currently just my sister and credit card.
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • Verbatim
    • By Verbatim 25th Sep 17, 7:12 AM
    • 4,513 Posts
    • 13,218 Thanks
    Verbatim
    Great. So only 0% debt left now.
    CCs @0% £24k Dec 05 £19,621.41 Au £13400 S 12600 Oct £11,981 £9481 £7500 Nov £7250 D £7100 Jan 6950 F £5800 Mar£5400 May £4830 June £4660 July £4460 Aug £3200, S £900, £0 18/9/07 DFW Nerd 042
    • zippygeorgeandben
    • By zippygeorgeandben 25th Sep 17, 8:43 PM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    Yes verbatim indeed and if you look at my original post, I used to pay £653 off my debts this time last year. So I'm thinking that £133 to my sister and then upping my DDs to £520 off the Sainsbury's card.
    Always appreciate your response.
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • zippygeorgeandben
    • By zippygeorgeandben 30th Sep 17, 3:29 PM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    Hello everyone, it's time for my monthly update.
    So it's kind of like an anniversary today, it's 12 months since I started attacking my debts like a yorkshire terrier.
    I've really paid off ALOT this month. The Tesco loan is NO MORE! The Zopa loan is NO MORE! The Halifax CC is NO MORE! I'm just left with the Sainsbury's CC which annoyingly, didn't take an amount out this month and it will come out next month. I might actually change this to come out mid month so at least 1 payment comes out regularly. Same with what I owe my sister, no payment taken out.

    My salary was £300 more this month due to a salary increase from moving jobs - this is exactly what I forecasted for each month. As I have also paid off long term debts freeing up an extra £280 per month this means I can put this extra money against the remaining Sainsburys CC.

    Other good news is that I have started doing some private tutoring - last month this brought in an extra £200.

    All in all, an excellent month for repaying debts - I'm going to start helping my lovely OH with their debts soon as I'll have freed up money. My original debt free debt was May 2019 but at this rate it'll gone by this time next year!
    Thanks for reading.
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • Reb2016
    • By Reb2016 30th Sep 17, 4:24 PM
    • 154 Posts
    • 360 Thanks
    Reb2016
    Such a positive update, which is so great to hear and great news on the extra from the tutoring that'll make a big dent too.

    Reb
    Light bulb moment 6th June 2017 £13333.63 Debt now 11837.25
    DFD was October 2020 40 months now 21st Dec 2019 26 months Overdraft £720/£2250
    • zippygeorgeandben
    • By zippygeorgeandben 30th Sep 17, 11:01 PM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    Thanks Reb2016 for your kind comments. You always pop along to keep me feeling positive
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • BrassicWoman
    • By BrassicWoman 1st Oct 17, 9:07 AM
    • 1,361 Posts
    • 5,731 Thanks
    BrassicWoman
    you are doing awesome

    Emergency fund established before helping OH, however...
    Downsized and mortgage free
    Nov17 grocery challenge £133.10/£150
    • Pixie5740
    • By Pixie5740 1st Oct 17, 11:11 AM
    • 11,103 Posts
    • 15,377 Thanks
    Pixie5740
    I wonder if this thread could be made a sticky so that all those wanting to consolidate their debts could read it.

    It be interesting to know once you've finished repaying your debts how much time and interest you saved by cutting back and snowballing versus consolidating.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Candyapple
    • By Candyapple 1st Oct 17, 11:15 AM
    • 2,477 Posts
    • 1,849 Thanks
    Candyapple
    I wonder if this thread could be made a sticky so that all those wanting to consolidate their debts could read it.

    It be interesting to know once you've finished repaying your debts how much time and interest you saved by cutting back and snowballing versus consolidating.
    Originally posted by Pixie5740
    Agreed and have done so

    Well done zippy on your progress.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
    • zippygeorgeandben
    • By zippygeorgeandben 1st Oct 17, 2:41 PM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    I feel kind of honoured and humbled if this thread is made a sticky. It probably needs moving to the DFW in reality.
    Interesting about the emergency fund suggestion. Would take me a long time to build up 3 months salary I think but yes, I'll take that on board.
    Have a lovely Sunday everyone.
    Thanks Brassicwoman and Pixie
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • zippygeorgeandben
    • By zippygeorgeandben 31st Oct 17, 11:23 PM
    • 709 Posts
    • 885 Thanks
    zippygeorgeandben
    Hello again everyone and thanks for clicking on my latest monthly post.
    What's happening in my world this month you wonder? Well... I've paid off another month of the Sainsbury and sister loans.
    Financially this month I've been much better off. I budgeted against my new salary this month so have more money coming in. I have also done quite a bit of private tutoring which has also boosted my salary. In a nutshell, I underspent this month by £1000.
    I have probably got around a month and a half emergency salary built up and I'm still wanting to boost this to at least 3 months.
    I also have this incredible urge to pay off these loans BUT as they are interest free, I should just keep them where they are at I guess. Maybe I should pay more per month as in post one I was paying £653pcm whereas this is now just £273.33
    Any advice?
    I suppose I could open a premium bonds account and put a couple of hundred away each month?
    Thanks for reading
    End Sep 2016 End Oct 2017
    £8236.57 £0
    (Tesco 4.8%) £0pcm
    £6185.75 £0(Zopa 4.0%) £0pcm

    £5344.50
    £2610.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1066.69 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £3676.73 Original DFD May 2019.
    • Dobbibill
    • By Dobbibill 1st Nov 17, 5:26 AM
    • 2,460 Posts
    • 3,559 Thanks
    Dobbibill
    Well done on what you've achieved so far - it's brilliant and so motivating for others who read this thread.

    I think I would be tempted to save the 3 or even 6 month salary then start putting anything you can into a high interest account until you reach the total owed on the loans.

    Once you are DF neutral, your salary is yours and you can reassess your budget.

    Another interesting question though - I wonder what other forumites think
    I'm a Board Guide on the Energy, Student Money Saving, UK Armed Forces and
    Local Money Saving - Wales boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.


    A person who never made a mistake, never tried anything new.
    • Mogley
    • By Mogley 2nd Nov 17, 11:03 AM
    • 224 Posts
    • 185 Thanks
    Mogley
    Thanks for the update. You have a real success story and it's good to see this thread as a sticky.
    I also have this incredible urge to pay off these loans BUT as they are interest free, I should just keep them where they are at I guess. Maybe I should pay more per month as in post one I was paying £653pcm whereas this is now just £273.33
    Any advice?
    Originally posted by zippygeorgeandben
    I posted this when you received the windfall.
    Some points from me:
    1) Ensure you've contacted student loans company about your proposed end of payment date. They should suggest setting up a direct debit so that you don't overpay. You can set your own direct debit payment amount. What is your existing and future interest rate? This will determine the payment priority.
    2) I would pay your sister first. This shows you appreciate what she did for you and as soon as you have the money to pay her back in full, you have done so. She will be more willing to help you out in the future.
    3) Clear the interest bearing debts.
    4) Maintain a monthly spending plan to clear the 0% debts within the required promotional time.
    5) Open interest bearing current account(s). Maybe one(s) that has a regular saver attached to it. Deposit any remaining capital you have from the £10k + the £1.5k balance in your existing current account into the interest bearing current account(s).
    6) When and as soon as you get paid each month direct the money you used to pay for debt into regular savings account(s).
    7) Once you have enough saved to cover your debt and six months easy access emergency fund, use these forums to look at other ways in which you can save/invest.
    Originally posted by Mogley
    I think in your own way you've worked through points 2-4 (not sure about point 1 as no further mention). So my answer to your question is to move onto points 5 and 6 (which is a similar approach to Dobbibill). Use "The best bank account guide" on the main site to help. Happy Saving .
    No.25 for 2017 £1070/£4000 saved.
    You should pay attention to the needs of the moment - otherwise there is no future. But to ignore the future is foolish - living solely for the moment leaves nothing for when the next moment arrives.
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