I Wannabe debt free! Newbie help needed

adray

Hi guys and gals,

I'm Adrian, i'm 19 and well the bank got me almost as soon as I turned 18 I love my cars and well a loan seemed like an AMAZING! idea (at the time!) so I took out a loan for my first self bought car then after a few months decided I wanted more power. So back to the bank and got myself another car, this time they presauded me taking out more money would be a grand idea so I took out more, paid off my original loan with the price of my car sale, well that was the plan. Instead the day I sold my car i went into the bank and stated I want to pay this money into my account and use it to pay off my £6000 loan to which I was £14 short so I told them to use money out my current account to pay the difference.

Weeks and months went by and the money from the sale of my car sat in my account so I, stupidly, dipped into it. finally I got an appointment with the bank to sort this and because I dipped into it I then had to take out a fresh loan at £9000 to cover paying off both my original loan and my second loan and starting from fresh. I took this over 5 years and have something like 21% APR to payback too, £227.30/per month if I remember correctly.

Now I have came into the frame of mind that I am best selling my car and buying a car which I don't require a loan for so I have but this has taken me into my overdraft £560 to date . Now the only reason I have not sold my car yet is cause someone shunted me in my car so I have to wait on that getting fixed which mean paying out £500 excess and waiting for about 3 weeks to get that money back . So this is going to take me to about £1100 into an overdraft

I am also in the proceeds of buying a flat, joint, with my friend we have mortgage in place, bank aware of my situation but I want to clear off as much debt as possible before we move in, March 2009.

When I come to sell my car I believe I can get £7000 atleast for it but this leaves me with say £2000 to pay off for the rest of my loan. Now do I take out a Super Balance Transfer 0% CC to pay this difference and then pay the bare minimum until my wage rise in August when I can then pay off more? Or what do I do? and Also how do I get myself out my overdraft .

Good news is I am in an excellent apprenticeship and my money goes as follows;

12,885 - currently
19,000 - Aug 09
24,000 - Aug 10
27,500 - Aug 11
36, 000 - June 12 (once timeserved)

So do I try hold off paying off CC if I use them to clear the difference once my money increase or do I try do something now.

I want to be able to afford to live when I move into the flat, which I MUST do for my work, no way around not doing that lol.

So debts to date summary -

£9000 - RBS loan @ 21% over 5 years £227.30/month
£560 - RBS overdraft - currently

Any help will be much appreciated :j

Thanks for reading,
Adrian

crazyhazy

What are your current outgoings? Do a soa, see the link at the top of this board, think the website is something like www.makingsenseofcards.com then we'll be able to see what money you have available to pay off the rest of your debt each month.

LilacPixie

Well firstly welcome.

Secondly a full SOA will be handy, you may also want to do projected one for when you move into flat. SOA template is here

Another thing to consider is the value you put on your car. The !!! seems to have fallen out the car market at the moment. Can I ask what it is you drive??

The !!! has also fallen out of the housing market and I must admit if it was me i would use the money I had saved as a deposit to clear the outstanding finance and rent for a while until house prices stabalise. Of course this is entirely your choice.

adray

Monthly Income Details
Monthly income after tax................ 780
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 780
Monthly Expense Details[/b]
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 85
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 40
Clothing................................ 0
Petrol/diesel........................... 140
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
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)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 265


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 8000
Other assets............................ 0
Total Assets............................ 8000

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
Car Loan.......................9000......227.3.....21
Total unsecured debts..........9000......227.3.....

Monthly Budget Summary
Total monthly income.................... 780
Expenses (including secured debts)...... 265
Available for debt repayments........... 515
Monthly UNsecured debt repayments....... 227.3
Surplus(deficit if negative)............ 287.7

Personal Balance Sheet Summary
Total assets (things you own)........... 8,000
Total Secured debt...................... -0
Total Unsecured debt.................... -9,000
Net Assets.............................. -1,000

crazyhazy

Ok, so your mobile phone could be reduced, how on earth do you manage to spend £85pm! and once your car is sold that will free up the petrol money too, which will give you extra to pay off your loan quicker. At the moment according to your soa you should have £287pm available anyway so add on the extra you can save and selling your car and you should be able to pay the loan off super quick.

adray

I drive a 2003 Skoda Fabia VRS but it has been modified to a very high standard (engine modifications) and not a bodykitted boy racer car :rotfl: I have been offered £7000 on a couple of occassions however I need to get the damage from the shunt fixed first. A very similar car and another with less both sold for £10,000 prior to the market well going downhill.

We do not have a deposit for our flat, as it is a shared equity flat owned by a government body, so basically we buy as much as we can afford (£70,000 which gives us 54% share) and we can buy more or the rest when we can afford to. They cover what would be our deposit in their equity.

adray

crazyhazy wrote: »

Ok, so your mobile phone could be reduced, how on earth do you manage to spend £85pm! and once your car is sold that will free up the petrol money too, which will give you extra to pay off your loan quicker. At the moment according to your soa you should have £287pm available anyway so add on the extra you can save and selling your car and you should be able to pay the loan off super quick.

Unfortunately the mobile phone cost is due to having two contracts at the moment, in the process of buying out my orange contract. And I have taken out a new contract only on 1st of October for 18months at £45 per month.

Also with regards to the fuel money, I won't be reducing that as that is what I use in my new car which I bought, no loan on that car but did put my into my overdraft, and I need my car to get to college

crazyhazy

It's still worth trying to renegotiate the mobile tariff, I was surprised cos my h recently took a new 18m contract to get a "free" ps3 but he called last week and was able to lower the tariff. Shame about the petrol, have just realised though you have no figures for car ins, road tax etc?

adray

I am fortunate in that they are taken care of by my dad and through his company insurance.

I may give them a phone and see what I can sort out...

What company was that? also what do you say to them as I've tried this in the past and been unsuccessful

adray

anymore help?

natsplatnat

With regards to your mobile bill - see if you can change the one you don't use to a pay as you go. My OH did this with his and then he just topped up the minimum as and when he had to to keep it in their guidlines.