Debt of £37,000, need help URGENTLY!

Jo4

Someone I know has a debt of £37,000. I have done Martins spreadsheet with them and worked out they can afford to pay £310 a month. They own there own house.

Now for the questioning, what would be the best loan for them? Should they get a secured or unsecured loan? How long would it take to pay the loan back. Wouldn't they be better with payment protection so if they were out of work that the loan would be paid for them?

Please answer as soon as possible as I want to try and get this cleared up for them before Christmas.

Johan

I don't know if any loan company would lend them £37000 unsecured, you could try perhaps but I doubt it.

Would they consider a remortgage perhaps, if they have the equity on the house, the APR would be cheaper for starters, so shop around on the internet for the best deals.

They could also seek the help of CCCS, National Debt line or Citizens Advice Bureau, see this site for the links, they should do it soon because after Christmas the whole planet will be seeking help with their debts.

I hope they will get sorted.

johannamse

A loan is not always the best idea. Your friend will not get an unsecured loan for that much and it is always risky turning unsecured debt to secured debt, as you could loose your house.

You should move your post over to the Debt Free Wannabe board.

People in debt are a bit like Alcoholics...Until they "get it" for themselves there is little you can do. Try and encourage them to visit this site, buy Martins book for xmas and if possible get them to post on the debt free board.

You are a good friend, but I doubt this will get sorted by xmas.

Good Luck.

Jo4

Johan wrote:

I don't know if any loan company would lend them £37000 unsecured, you could try perhaps.

Would they consider a remortgage perhaps, if they have the equity on the house, the APR would be cheaper for starters, so shop around on the internet for the best deals.

They could also seek the help of CCCS, National Debt line or Citizens Advice Bureau, see this site for the links, they should do it soon because after Christmas the whole planet will be seeking help with their debts.

I hope they will get sorted.

THANKS for responding! I was wondering if 2 loans of £18,500 would work but when I looked at www.moneysupermarket.com it would take between 15 and 25 years and it would not include payment protection!!

Jo4

johannamse wrote:

A loan is not always the best idea. Your friend will not get an unsecured loan for that much and it is always risky turning unsecured debt to secured debt, as you could loose your house.

You should move your post over to the Debt Free Wannabe board.

People in debt are a bit like Alcoholics...Until they "get it" for themselves there is little you can do. Try and encourage them to visit this site, buy Martins book for xmas and if possible get them to post on the debt free board.

You are a good friend, but I doubt this will get sorted by xmas.

Good Luck.

THANKS for responding! I thought that they might get 2 loans of £18,500. I would love to get this sorted by Christmas as he is sticking his head in the sand and she is making herself very ill as a result of the debt. I just wish they had said to me sooner, maybe I could have done something!

Jo4

Apparently they have equity in the house and therefore can put it on their mortgage. I just hope they learn from their mistake as next time they might not be so lucky!

Jo4

Just wondering how much extra would it cost to add £37,000 to their mortgage? I want to know to see if the £310 they have to cover it will actually cover it.

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Jo4 wrote:

Just wondering how much extra would it cost to add £37,000 to their mortgage? I want to know to see if the £310 they have to cover it will actually cover it.

We pay £320 ish on a repayment mortgage of £52000 over a 25 year term.

It all depends on how flexible their present mortgage arrangements are.

Hope this helps.

I agree with previous posts that your friends should really take a look at the website themselves as you can't do it all for them.

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Tondella

try try try to get them to take a look at the debt free wannabe threads. There are loads of us over there, some with twice the debt you mention and less equity in the house. There are loads of suggestions for managing debt and if they feel confident enough to post then they will get loads of support. Psychologically, getting a consolidation loan often means that the person doesn't have to confront their debt and attitudes to money, and so more debt builds up again. Good luck, you're a good friend!

Johan

Jo4 wrote:

Just wondering how much extra would it cost to add £37,000 to their mortgage? I want to know to see if the £310 they have to cover it will actually cover it.

I estimate about £190 a month or so or thereabouts on top of their mortgage payments, see different lenders on line for a more accurate figures, I hope they will get it sorted.

webmasterpolo

Where is the debt?

on credit cards?
store cards?
loans?
HP?

Do you know what any of the APR rates are for the different amounts?

The more info you can get from your friend and put into the site the more help we frantic MSEers can give :-).

Why don't you sit down with your friend and bring them to this site and help them post and maybe read some of Martins excellent articles. With you by their side it may be less daunting for them and you will be able to guide them around.

-Web