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  • FIRST POST
    • zippygeorgeandben
    • By zippygeorgeandben 3rd Dec 16, 11:11 PM
    • 661Posts
    • 754Thanks
    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
    • 661 Posts
    • 754 Thanks
    zippygeorgeandben
    Thanks Verbatim for taking the time to post. Unfortunately, in the area where I live (and I understand that I choose to live here), buying a property is just not an option. It's a nice middle class area with close links to the tube in North East London. 2 bed flats are approx £500,000
    Houses between £600-625,000.
    https://www.keatons.com/property-details/4420-victory-road-e11

    I'd love to have five minutes on the phone with our oh so lovely PM. I'd like her to explain why two people on pretty decent incomes have not a cat in hells chance of getting on a ladder!
    I do realise that I'm on a debt free board here before anyone wants to point out the irony!
    Considering using the remaining £5,000 to perhaps pay off either the Sainsburys or putting towards my Summer 18 holiday.
    End Sep 2016 End August 2017
    £8236.57 £4876.49
    (Tesco 4.8%) £222.61pcm
    £6185.75 £851.34 (Zopa 4.0%) £48.99pcm

    £5344.50
    £2890.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1333.35 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £11499.70 Original DFD May 2019.
    • enthusiasticsaver
    • By enthusiasticsaver 16th Sep 17, 10:50 PM
    • 4,227 Posts
    • 7,610 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.
    Countdown to early retirement on 31.12.17 3.5 months to go.
    • zippygeorgeandben
    • By zippygeorgeandben 17th Sep 17, 12:40 AM
    • 661 Posts
    • 754 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 August 2017
    £8236.57 £4876.49
    (Tesco 4.8%) £222.61pcm
    £6185.75 £851.34 (Zopa 4.0%) £48.99pcm

    £5344.50
    £2890.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1333.35 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £11499.70 Original DFD May 2019.
    • Tarambor
    • By Tarambor 17th Sep 17, 1:45 AM
    • 1,148 Posts
    • 793 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
    • 4,485 Posts
    • 12,950 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
    • 661 Posts
    • 754 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 August 2017
    £8236.57 £4876.49
    (Tesco 4.8%) £222.61pcm
    £6185.75 £851.34 (Zopa 4.0%) £48.99pcm

    £5344.50
    £2890.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1333.35 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £11499.70 Original DFD May 2019.
    • zippygeorgeandben
    • By zippygeorgeandben 17th Sep 17, 11:25 AM
    • 661 Posts
    • 754 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. I'll give you an example - The site of West Ham United's old ground is being turned into 'luxury flats'. 1 bedroom, 1 bathroom flats start at £360,000. Upton Park is also a dirty/rundown area despite what the Mayor of Newham tries to dress it up as. I lived there for 3 years so I feel qualified to talk about it. So not only are you paying a ridiculous amount, you also get a tiny apartment with no pubs/bars/cinemas/shops. 2 bedroom one bathrooms are around £550,000. I looked into a mortgage, told the advisors how much we earned debts etc. and we could get a mortgage to a maximum of £400,000 (that's included a £16,500 stamp duty and £20,000 savings).
    Now you tell me how the residents of Newham, a poor borough could possibly afford to buy one of these properties? They will be trying to gentrify it but it won't happen. And it shouldn't because it's a vibrant area which works for the residents of Newham.
    End Sep 2016 End August 2017
    £8236.57 £4876.49
    (Tesco 4.8%) £222.61pcm
    £6185.75 £851.34 (Zopa 4.0%) £48.99pcm

    £5344.50
    £2890.04 (Sainsburys 0% until 06/19) £140pcm
    £2000.00 £1333.35 (Sister 0%) £133.33pcm

    Total debt
    £19.766.82 £11499.70 Original DFD May 2019.
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