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  • FIRST POST
    • zippygeorgeandben
    • By zippygeorgeandben 3rd Dec 16, 11:11 PM
    • 707Posts
    • 882Thanks
    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 6
    • Reb2016
    • By Reb2016 2nd Nov 17, 7:37 PM
    • 148 Posts
    • 333 Thanks
    Reb2016
    As the loans are interest free I would also go with saving 3 months of salary first, then you have a really good safety net.
    You are doing so well i’m Sure you will have that 3 months saved in no time
    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 2nd Nov 17, 10:43 PM
    • 707 Posts
    • 882 Thanks
    zippygeorgeandben
    Aw Dobbibill, you are too kind. Would you class any money in my current account over £0 as part of a monthly salary? i.e. if I had £1500 in my account, that what be £1500 salary builder or would you say £1000 of that is a salary builder and £500 just a contingency?
    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 3rd Nov 17, 6:37 AM
    • 2,449 Posts
    • 3,551 Thanks
    Dobbibill
    Aw Dobbibill, you are too kind. Would you class any money in my current account over £0 as part of a monthly salary? i.e. if I had £1500 in my account, that what be £1500 salary builder or would you say £1000 of that is a salary builder and £500 just a contingency?
    Originally posted by zippygeorgeandben
    There is no right or wrong answer to this - it's personal choice.

    If you keep it in a separate account it becomes easier. Preferably a high interest account

    Your funds in your account may be spending money. Why is it there? What was it's purpose when it arrived in the account? Has it just built up from being frugal with your balance?
    This is where categories for every single penny works so effectively.

    You have to decide if you want the £500 contingency.

    Have you seen the 3 - 6 month EF challenge?
    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.
    • zippygeorgeandben
    • By zippygeorgeandben 3rd Nov 17, 8:47 PM
    • 707 Posts
    • 882 Thanks
    zippygeorgeandben
    Ok - I'll take a look this weekend at high interest savings accounts Dobbibill.
    The money has built up due to a combination of a) underspending b) not using all my dads money he gave me and c) selling off my Yankee Candle collection - in fact I've arranged to sell a few for £850 so that can go towards the fund.
    I just had a look at the 3-6 month challenge - I think I'm up for that!
    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 5th Nov 17, 10:28 PM
    • 148 Posts
    • 333 Thanks
    Reb2016
    Wow I had no idea Yankee candles were worth that much that’s impressive

    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 6th Nov 17, 7:33 PM
    • 707 Posts
    • 882 Thanks
    zippygeorgeandben
    They keep their value but Ive got some pretty rare ones too...
    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.
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