Best way to get free?

powned

Hi all, been reading the site for ages and thought id give the forums ago.

need your advice/opinion on this situation: (all figures are approximate)

My brother has a loan of £7200 at 9% APR (northern rock). He also has a 'Managed loan' (whatever that means!) with HSBC owing £2100 at around 13% APR. He Pays £155 and £177 per month respectively.
He can afford to pay around £400 per month towards his debt. Another point to bear in mind is that he has missed payments in the past so his credit rating will be bad.

My dad has offered to give him an interest free loan for the £2100 HSBC loan but this will have to be repaid over 1 year (12 x £175). This would leave him with 225 to put towards the £7200 northern rock loan.

He wants to get the loan paid off quickly as possible and obviously wants to do it as cheaply as possible so he can become a taxi driver

Can anyone advise me on what would be the best way to get this cleared?

I will be greatfull for any advice you can offer!

Thanks

Karl

Thefunkygibbons

Has he changed the behaviour that led to the debt in the first place? He needs to prove to himself that he can keep to a budget

Is the loan fixed or variable? If it is fixed he may not be able to overpay so he will have to say up and pay it off when he has enough

If it is variable the there are two things to do

He should see if he can get a better deal. Look at the credit card tables to see what is available. His credit rating may stop him getting a 0% card but he may be able to get a life of the balance card. The lowever interest will help

He should set up a standing order that goes out after payday so that the money is gone before he sees it, otherwise it may be spent on something else


Of course, if he is really brave he could post a statement of income and expenses on here and we could see if we can help him identify saving so as to have more each month to clear the debt with

powned

Thanks for the reply Funky,

He has improved his spending habbits a lot but IMO there is still room for improvment!

One of his loans is variable, i suspect it is the smaller HSBC one as he had a settlement figure for the larger ammount from northern rock and he could save approx £800 if he paid it in full now.

He currently has his payments taken out just after he is paid. I will look into those life of balance cards Good idea about getting him on here.. ill ask him!

Anyone else have any other ideas on how to manage this? :beer:

Kevicho

If he could post a full list of what he earns compared to what bills he has ie rent/mortgage/food/clothes/phone etc then he may be able to cut costs in other areas to free up more cash for the loan repayments