At a Crossroads - Help Please!

ajay_182

Hi,

I wondered whether anyone could offer some advice. Ill explain my situation.

I currentley have lots of loans and a credit card spread out between different lenders.

Basically, I want to get a mortgage and need to tidy my finaces up.

My montly DD's at the min are,

AA £100
AA £120
Northern Rock £100
Tesco CC £50 min payment.

Now, I also have 2 overdrafts maxed out with HSBC and Lloyds TSB of £1500 each.

Now, when I total all this debt up, it comes to a shcoking £14000. The one AA loan with the DD of £120 is almost up, so im not going to touch that, the £14000 figure is minus this.

Ive looked at some personal loans, and over 6 years, it looks like it will cost £250 a month. At the min it costs £250, but nothings coming off my credit card and my overdrafts are always maxed. If I took out a loan for £14000 over 6 years (this is currently an estimate as I need to contact them all for settlement figures and no loan has been agreed) I would pay £250 and after this, in theory, id be debt free.

My crossroads is this. If I pay what i am now, all loans would be gone by 2012. My Credit card and overdrafts would be the same though. I could then maybe work on these, but if i take the loan out, i would be debt free by 2015 and as im not great with money, obviously, I know that as long as I pay the £250 a month, this would be the time I wouldnt owe anything.

I dont have to pay anything else, just mobile phone, gym mebership, AA cover etc... So as I have an income of around £1350 a month after tax, A mortgage could be possible to afford with a payment of £250, or so I think. I dont have any savings, My parents are very kind and have agreed to help out with most, if not all the 10% deposit id need for a house.

What does everyone think? Good idea? Am I just hiding my debt and convincing myself this sounds good? Afterall, 6 years is a long time. I have no intention of getting into anymore silly debt, I havent done anything stupid for over 12 months now. I was just stupid and naive a few years ago.

Any advice would be great. Feel free to ask questions if something doesnt make sense. Thanks.

crazyhazy

I think generally it is better not to consolidate cos you might pay more in interest, if you post your soa then people might be able to suggest ways of reducing your outgoings to enable you to pay off your debts quicker without consolidating

ajay_182

Sorry, SOA?

ajay_182

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1350
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1350
Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 200
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 20
Clothing................................ 50
Petrol/diesel........................... 80
Road tax................................ 15
Car Insurance........................... 40
Car maintenance (including MOT)......... 20
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 590

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 3000

No Secured Debt
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco CC.......................3000......50........0
AA.............................5000......122.......0
AA.............................5000......100.......0
Norther Rock...................4500......100.......0
Total unsecured debts..........17500.....372.......-

Monthly Budget Summary
Total monthly income.................... 1,350
Expenses (including secured debts)...... 590
Available for debt repayments........... 760
Monthly UNsecured debt repayments....... 372
Surplus(deficit if negative)............ 388
Personal Balance Sheet Summary
Total assets (things you own)........... 3,000
Total Secured debt...................... -0
Total Unsecured debt.................... -17,500
Net Assets.............................. -14,500
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

perkisc

Hi

What interest rates (APR) are you currently paying on your loans and Credit cards

crazyhazy

You have or should have £388 extra to pay off your debts each month according to you soa, use the snowball calculator (www.whatsthecost.com) and input your debts along with int rates and you'll see how much quicker you could be debt free by paying extra each month.

crazyhazy

Also, did you not say the aa loan was nearly finished? You need to provide the outstanding balances on your loans/credit cards not the original amounts.

TotallyBroke

ajay_182 wrote: »

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1350
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1350
Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 200
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 20
Clothing................................ 50You don't need to spend this every month
Petrol/diesel........................... 80
Road tax................................ 15
Car Insurance........................... 40
Car maintenance (including MOT)......... 20
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 100You don't need to spend this every month
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 590

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 3000

No Secured Debt
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco CC.......................3000......50........0
AA.............................5000......122.......0
AA.............................5000......100.......0
Norther Rock...................4500......100.......0
Total unsecured debts..........17500.....372.......-

Monthly Budget Summary
Total monthly income.................... 1,350
Expenses (including secured debts)...... 590
Available for debt repayments........... 760
Monthly UNsecured debt repayments....... 372
Surplus(deficit if negative)............ 388You have this much spare every month!!!
Personal Balance Sheet Summary
Total assets (things you own)........... 3,000
Total Secured debt...................... -0
Total Unsecured debt.................... -17,500
Net Assets.............................. -14,500
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

You have a spare amount of money yet I'm guessing you spend it. You have mentioned gym yet that is not in your soa and should be. Without even cutting back just adding the spare £388 onto the £50 tesco will clear tesco debt in July. Please post a correct soa with all your monthly payments. If you don't know where your money is going write a spending diary. Write it down in a book before you buy it. By the time you have done that you will realise you won't need it.
Good luck

natsplatnat

ajay_182 wrote: »

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1350
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1350
Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 200
Management charge (leasehold property).. 0
Council tax............................. 0??
Electricity............................. 0??
Gas..................................... 0??
Oil..................................... 0
Water rates............................. 0??
Telephone (land line)................... 0??
Mobile phone............................ 35 could you lower this? speak to provider
TV Licence.............................. 0??
Satellite/Cable TV...................... 0
Internet Services....................... 0??
Groceries etc. ......................... 20
Clothing................................ 50 necessary? put toward repayments
Petrol/diesel........................... 80
Road tax................................ 15
Car Insurance........................... 40 lower when due for renewal
Car maintenance (including MOT)......... 20
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0??
Contents insurance...................... 0??
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 100 can you trim?
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 590

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 3000

No Secured Debt
Unsecured Debts
Description....................Debt......Monthly...APR
Tesco CC.......................3000......50........0
AA.............................5000......122.......0
AA.............................5000......100.......0
Norther Rock...................4500......100.......0
Total unsecured debts..........17500.....372.......-

Monthly Budget Summary
Total monthly income.................... 1,350
Expenses (including secured debts)...... 590
Available for debt repayments........... 760
Monthly UNsecured debt repayments....... 372
Surplus(deficit if negative)............ 388
Personal Balance Sheet Summary
Total assets (things you own)........... 3,000
Total Secured debt...................... -0
Total Unsecured debt.................... -17,500
Net Assets.............................. -14,500
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

Hi Ajay!!:j

I am by no means an expert - but have had a look at your SOA and have marked my suggestions in purple! Also, you seem to be missing some common outgoings like electricity, phone etc. Are you paying these or are they included in your rent? (Are you living at home).

The SOA shows you have a spare £388 a month to pay off your loans, cards etc! Throw as much at your highest interest debt first. (look at the snowball calculator to see much this will save you in interest and when it will bring your finish date forward to).

I'm sure someone with more knowledge / experience will be along shortly!

Most of all, keep reading the posts on here - you will pick up loads of ideas, tips and hints to make your money go further!

ajay_182

First off, thanks for the replies, very fast!!!

I live at home, so my rent covers everything that side.

I could reduce my entertainmet, but I include the £30 gym membership in there because I couldnt see where to put it. So that only leaves me £70 and I must go out with my friends otherwise whats the point in doing anything if you dont have some sort of life. £50 for clothes could be reduced, I have enough.

So people are thinking my original idea of getting a loan to cover my overdrafts, credit cards and loans is a bad idea then?

below is a revised SOA. The loan amounts are just estimates, need to get an actual settlement figure.

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1350
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1350
Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 200
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 20
Clothing................................ 50 Dont really need this.
Petrol/diesel........................... 80
Road tax................................ 15
Car Insurance........................... 40
Car maintenance (including MOT)......... 20
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 100 Includes £30 gym
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 590

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 3000

No Secured Debt
Unsecured Debts
Description....................Debt......Monthly...APR
Northern Rock..................3500......100.......8.9
AA.............................2800......122.......7.9
AA.............................4000......100.......6.6
Tesco Credit Card..............3000......50........19.9
Total unsecured debts..........13300.....372.......-
Plus £1500 Lloyds TSB O/D and £1500 HSBC O/D.

Monthly Budget Summary
Total monthly income.................... 1,350
Expenses (including secured debts)...... 590
Available for debt repayments........... 760
Monthly UNsecured debt repayments....... 372
Surplus(deficit if negative)............ 388
Personal Balance Sheet Summary
Total assets (things you own)........... 3,000
Total Secured debt...................... -0
Total Unsecured debt.................... -13,300
Net Assets.............................. -10,300
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

TotallyBroke

On one hand you are talking about getting a mortgage but you also want to spend £100 on gym and going out. It cannot happen.

You pay £200 rent. Buy a house you will be paying £800 mortgage, £30 life insurance, £100 council tax, £30 water, £80 gas & electric, £20 buildings, contents insurance. YOu will not be able to afford this without changing your spending habits.
My suggestion to you is pay off your debts asap by seriously cutting back. Then when you are debt free start saving for your first home. From your wages each month give your parents their household money £200. Then based on the figures I have given you save an equivelant amount for each of these bills into a savings account £860. Get used to living on the rest £290 for sometime before you actually have to. Remember this will then have to include your food and petrol car insurance etc etc etc.