How should I approach this?

NTE

Hey, all. Just signed up.

Getting down to it, I currently have £2k on my (Lloyds TSB) CC and £1.5k on my Lloyds Current account overdraft.

I want these cleared as quickly and succinctly as possible.

My rent is £275/month, council tax works out at around £60/month and general bills are around another £200/month.

Then I have food, travel and so on on top of this.

My take-home is £933.54 per month according to the listentotaxman PAYE calculator. This will go up to a calculated £991.61/month at the start of March. I also have a sizable bonus every quarter (£1k just received, expecting £2-3k/quarter as all targets are now being hit).

I'm 21 now and I'd like to wipe this debt off as soon as I can. My credit rating is okay at the moment and my girlfriend and I received an agreement in principle from Northern Rock to £95k when we were contemplating buying a few months ago (we decided to rent for at least another year and have a nice place in a great part of town ) so she's decent too.

I suppose what I'm looking at would be a £4k unsecured loan with a decent interest rate that would allow me to pay off large chunks when my bonus comes through...Not having thought about a loan before, I had no idea where to start...Had a good look through the site and now have some thoughts but I'm looking to you guys as to what would be the best route.

Thanks in advance,

NTE

southernscouser

Hi NTE, and welcome to MSE.

Have a look at thread below then post back here with the required information. It makes it a lot easier to get our head round your position and we can offer the best advice possible.

http://forums.moneysavingexpert.com/showthread.html?t=107280

A consolidating loan isn't always the best way to go. Quite often it can be cheaper to move money around on your existing debts. Also many people (me included) have fallen into the trap of clearing CC's with a loan then spending on the CC's again!

Thefunkygibbons

If you think your credit is good, can you role the money onto a 0% credit card and clear this with the bonuses?

NTE

Thanks for the welcomes, guys.

The CC is already cut-up and gone

Monthly Incomings:

My salary - £930
Partners salary - £800
Benefits - £0

Total - £1730

Monthly Outgoings:

Mortgage/Rent - £550
Gas - £20
Electric - £25
TV License - £10
Phone - £40
Food - £300
Travel (pass) - £40

Total: £985

Lloyds TSB CC – Balance £2,000 (limit £2,000) APR 12.9%

Lloyds Overdraft - £1300 (limit £1,500) APR unknown

Hope the above helps.

Thanks,

NTE

rchddap1

Credit card isn't necessarily gone if you just cut it up. Did you call them and cancel also?

NTE

Not yet,no. I've just cut it up to prevent any future spending.

NTE

inmypocketnottheirs

I would go for the zero option credit card. Better still if you can find a Super Balance Transfer to clear the overdraft. Then just whack payments off with bonuses.

HTH

fairylights_2

Wow! with numbers like that you'd be better off just paying off the debt instead of consolidating!

I have to say though, that your food bill is massive - I feed a family of four for less a month than you do.

Still, you could clear your debt pretty quickly without having to change much at all. You're left with almost £750 each month after you've paid what you need to. At that rate, two months for your overdraft then another three maybe four to clear your cc. It's doable, and much better than putting yourself more in debt to the tune of four grand and years of paying that off. It's tough, but you need to live like you're broke for a few months and you'll be clear - that way when you've cleared everything in a short space of time, you'll be able to enjoy things a lot better.

Also, you're not paying PPI are you? my oh's cc had it and it used to suck MASSES out of his monthly payments.

southernscouser

NTE wrote:

Thanks for the welcomes, guys.

The CC is already cut-up and gone

Monthly Incomings:
Total - £1730

Monthly Outgoings:
Mortgage/Rent - £550
Gas - £20
Electric - £25
TV License - £10
Phone - £40
Food - £300
Travel (pass) - £40

Total: £985

Lloyds TSB CC – Balance £2,000 (limit £2,000) APR 12.9%

Lloyds Overdraft - £1300 (limit £1,500) APR unknown
NTE

OK,

Check the utilities boards to make sure you are paying the least on gas and leccy. Also you should be able to cut down on the phone bill. Check the phone board.

Food! You will be amazed how cheaply people on here eat and it's not all baked beans and hotdogs. Good healthy food. The oldstyle board is the place to go to cut that down.

Your overdraft APR is likely to be quite high! Maybe even 20%! Check the credit card board for a 0% card that allows you to transfer overdrafts. I know Egg do but don't know what deals they are doing.

What is your credit rating like? Have you missed any/many payments? Any defaults?

If not apply for another 0% card to transfer the CC debt. This way you won't be paying any interest.

Even as you circumstances stand you have over £700 spare to pay off debts. Are you and OH both responsible for the debt? Do you have any savings?

I know there are loads of questions there but the more we know the better we can help.

Also start a spending diary. Every day note down every single penny you spend. At the end of the month you may be amazed to learn what you spend your money on! I was!

NTE

inmypocketnottheirs wrote:

I would go for the zero option credit card. Better still if you can find a Super Balance Transfer to clear the overdraft. Then just whack payments off with bonuses.

HTH

This seems to be the 'best' option so far from my POV.

In total (at this moment, I receive £350 on thursday from my other half - All the bills are in my name, she gives me just under half each month), I owe:

Classic - 1264.75 DR
Classic Credit Card - 1938.84 DR

Total - £3203.59

The debt is entirely mine - racked up about 14 months ago when I was made redundant shortly after signing a 12 month lease and struggled to find work for 4 months. I then made the mistake of minimum payments.

I do have high outgoings, yes. A serious magazine habit (not that kind of magazine ) and a fondness for good food have meant that recent outgoings have been rather obscene. That and the dreaded eBay.

Good things: I own my car outright, paid cash for it and the insurance and tax are paid for another 12 months so I don't need to worry about that.

Commuting is currently around £40/month (Newcastle has pretty decent public transport) but I will be purchasing a bike after xmas as it's only a 20 minute journey and it'll help burn off a few lbs.

I don't pay water (landlord does), saving me ~£30/month.

I do occasional tech work for people who know me which brings in a little extra now and then.

Would it be better-advised to get two 0% CCs to pay off the CC and OD seperately?

Thanks,

NTE

NTE

I should note that my girlfriend has very severe Coeliacs meaning that a lot of what we purchase has to be gluten-free...Unfortunately, a lot of things which are guten-free are incredibly expensive (£2/kilo for pasta for example...I purchase my pasta in 5Kg bags for about £2.50).

NTE