Arrrrgh - how do I get this lot cleared?

KatrinaC_2

Hi,

I've got three outstanding debts which I'm just about managing to keep up with at the moment but I've kind of had my head in the sand and need to sort out what I should do with them;

Overdraft with Royal Bank of Scotland: £1,300, fees of £40 per month
Halifax Credit Card: £1400, minimum payment £25 per month
Barclaycard: £500, minimum payment about £15 per month

My partner has just found a job after 18 months of unemployment so we should have about an extra £150 left at the end of the month, however in April I'm going to have to start paying back my student loans at a massive £250 per month.

I'm working on cutting back the budget and think I have worked out a few ways to save a bit here and there, but it seemed like the first step was to stop spending money on maintaining debts rather than clearing them.

Thanks,

Kat

Willsnarf1983

student loans???

which loans are they at £250 a month

ur not on about the ones ur allowed each year are u which only take money once ur earning over a certain amount (15k)


will

KatrinaC_2

My loans are the old style ones - pre 1998 - where you pay back everything you owe over 5 years. At £65 per month per loan it's going to be about £250 per month. On the plus side these loans you start paying back once you earn more than £23,000 (ish) and they only last 5 years. It'd be nice to drop the payments down though... at Uni you think that £23,000 is a lot of money until you graduate and five years later have to support a family on it.

Kat

Willsnarf1983

ah right gotcha

right write a=out a statement of affairs detailing exact spending, inc food, entertainment, petrol, utilities, insurance etc etc etc and then of ur income and the people on here maybe able to help u get a little extra cash


cheers

Will

KatrinaC_2

Here comes the shameful list of what we spent and what over the last few months:


Mortgage / Rent £400.00
Council Tax £58.33
Gas Bill £15.00
Electricity Bill £15.00
Home Phone Bill £20.00
Internet Bill £18.00
Mobile Phone Bill(s) £35.00
Food/household Shopping £200.00 :eek:
Clothes/luxuries Shopping £100.00 :eek: :eek:
Debt repayments £90.00
Car running costs £126.00
Childcare £300.00
Other stuff
(xmas, dentists, emergencies, etc) £200.00

Total Expenditures £1,692.33

Income £1840.00

The first thing that everyone is going to suggest is cutting back on shopping; it's already underway now that I'm back in charge of the groceries again! The clothes/luxuries bill is also being reduced as we've now got the work clothes and school uniforms sorted.

The mobile phones are a necessity to be able to keep in touch with the school/nursery and our employers as we both work out of the office most days - £35 covers 300 free cross net minutes and 200 free texts so it's not a bad deal, just an expensive one.

The childcare cannot be reduced, but we're waiting to see whether we qualify for assistance from the Working Families Tax Credit people. It is possible, but it's not an overnight decision.

The car costs can't be trimmed much either - we walk or cycle wherever possible and drive a 1.1 litre Corsa when we have to.

Other than that, anything anyone can suggest (especially with regards to whether to move the debts around and where to) will be incredibly helpfull. Like I said, we can afford the repayments now, but they're going to zoom up in 6 months and I want to be prepared for them.

Kat

brummiebabe

You'll need to look at the APR on the loans/cards that you have. Normally the best advice is to switch everything on to a 0% (for balance transfers) card e.g. Virgin & I think Natwest do one (look at the Credit Card forum for advice as to which is the best deal!) That way at least you're only paying back the debt & not interest!:D

Edinburghlass_2

Don't think your list is "shameful" at all, in fact I wish I was only paying £30 a month for gas and electric as I have to pay £85 monthly all year just for electric as we have no gas.

Now you appreciate that you can trim the food bills etc you are on the right road. I am also sure that if you have a read on the Telephone Boards that we could trim something off your home phone bill

Good Luck

trencherpilot

Even if your student loan is pre 1998, there is a clause in it that if you're earning below a certain amount you can defer it. I went to University in 1991 and after I left, defered it for 2 years after I left. Contact the Student Loans Company. (There're in Glasgow......or were) and see if they can help.

On a political note how come the Govt all got free degrees and now are making those of us younger than them pay for one?

trencherpilot

As for FTC, do it online, you get an instant (more or less) decision

cpjackso

KatrinaC wrote:

Mortgage / Rent £400.00
Council Tax £58.33
Gas Bill £15.00
Electricity Bill £15.00
Home Phone Bill £20.00
Internet Bill £18.00
Mobile Phone Bill(s) £35.00
Food/household Shopping £200.00
Clothes/luxuries Shopping £100.00
Debt repayments £90.00
Car running costs £126.00
Childcare £300.00
Other stuff
(xmas, dentists, emergencies, etc) £200.00

Your Mortgage, Council Tax, Gas, Elec are all pretty cheap. You could check out if you can get a cheaper mortgage but you might be stuck into the contract. If rent - possibly consider moving to cheaper house if possible.

Consider moving your current account to Alliance and Leicester - 0% overdraft and 5% in-credit interest. (** They have a referral scheme - please check the referral board for referrers. Edited by AbCon **)

Your home phone should be reducable to near £12 (the cost of rental) by using JustDial, 1899, 18866 etc. Read the article on the frontpage/mse email newsletter. Make sure you earn any quidco.com cash from moving phone provider.

I'm presuming the Internet costs are for ADSL, if so - this is cheap too, if not I'd consider adsl (try tesco.co.uk with signup bonuses/quidco).

If the mobiles are out of the contract period - cut them off and go for the cheapest 3 deal (Try a 6630/6680/K608i on e2save.com). Don't forget to earn £26.50 on each contract from quidco.com. Alternatively - look at the lists on {Removed by Forum Team} for 12 month free contract phones. (Make sure you buy from a reputable company that isn't going to go bankrupt).

Household shopping could be cheaper - I've started to use coupons at Tesco which saves us between 10% and 25%. (It's also a great laugh when they take the coups as if it was cash!). Put your feet up and use the tesco.com vouchers to get your food delivered and money off too.

You should be able to reduce the luxuries part considerably - however this is down to you to figure out where you want to cut back.

Reduce your xmas spending by buying at tesco (with coups) or taking advantage of offers on here - or as a long-term aim you could take advantage of boots advantage points loop-holes and then buy pressies on 3-for-2.

As for the part about £65 per loan - I had 3x student loans of £1500ish at the same time as you - and I'm just paying £57/month - NOT 57x3. You should probably ring the student loans company to confirm the charges. (Put it this way - you quote £250/month for 5 years - thats a total of £15,000 paid (approx £13,500 debt)).

If your debts are not on 0% cards - move them to one. Be careful of transfer fees. If the debts are already 0% work out a long-term strategy to move it all into one place (usually best). Cap1 often offer good deals and high credit limits. If you can't change your current account - you could move your overdraft onto your 0% credit card(s).

Good Luck!!

KatrinaC_2

Wow - thanks everybody! I didn't expect such a flood of suggestions this quickly! I'll try and reply to you all in this post.

brummiebabe
Heading over to the credit card boards right now - just wondering whether any company in their right mind will let me have a limit of that much!

Edinburghlass
The main reason that we can keep the gas and electric bills that low is that we are never in the home! At the moment we're not having to run the heating, are living on salads and soups and use very little lighting - that will certainly change when the winter comes and we have to spend more time indoors.

I'll take up the advice about the phones and look to see if anyone has advice about how to cope with Kingston Communications on the phone boards.

Trencherpilot
I've deferred my loans since 2001 but this year I will be over the earnings limit: I've just been promoted and get a good wage increase hopefully effective from November/December, but have been underpaid by about £5,000 per year for the last 14 months. The underpayment is supposed to be remedied in February/March as a lump sum, but the wage increase and the backpay are going to push me well over the deferment limit for this financial year. The following year (2007/8) I'm going to be on the repayment borderline so I'll have to wait and see how it goes.

(I agree about the politics though - anyone who went to university in the 1990s got a really harsh deal compared to those who went before. But that and the current loans system is a whole new thread of its own!)

cpjackso
Shall take all of your advice on-board; you must have spent ages wading through it all!

I'd never heard of Quidco before but have already started searching though it.

The student loans thing is apparantly correct; I have four loans at between £1500 and £2000 each, split between two student loan companies. After 4-8 years of interest the loans now add up to just under £10,000. Both companies have recently sent me next years repayment schedule, each asking for about £120-130. Having heard how much you're paying I think I will call them both to question their numbers though.

And if you are serious about the offer to switch to Alliance and Leicester, that would be fantastic!

---

Thanks again everyone!


Kat