the long and winding road...

linniestorm

Long time lurker, first (well second actually!) time poster!

Just wanted to say thanks to everyone on the board for all the great ideas that fly around here every day! (snowball site! genius!) I've been lurking for a couple of weeks, not sure that I could contribute much to any of the discussions, but I can empathise with a lot of the posts!!

I'm in the process of giving myself a strict talking to over my debt problems at the moment, like a lot of people went away to uni, spent too much, finished uni kept spending too much. I think I've identified my major mistake which was getting my own (well shared) place after uni when I just didn't have the job to afford it! Plus a couple of housemates not paying £100 and £200+ bills and me just absorbing them because they were useless and wouldn't pay up and I'd rather pay them that get taken to court for defaulting! I'm a bit of a wuss when it comes to confronting people! And I've taken myself in hand and consolidated before to get rid of 2 other cc and then of course used the remaining card instead of getting rid...nightmare!

So after 2 years of struggling with bills and repayments etc, I had my lightbulb moment last August, when I decided to ask my Mum if I could move home for a bit to try and reduce my outgoings. The rent and bills are a hell of a lot cheaper (and of course I'm paying a reasonable amount of rent etc cause my good ol' mum can't afford to keep me free and gratis!), and it means I can really hit the loans/cards and try and make a dent. I've managed to get a job on the same wage as I was on with my own place (and the town where I come from has a lot less opps job-wise so that's a bit of a lucky break!) so I'm going to plough the excess into the debt, and buy a copy of the money diet (used hopefully, which I realise is a bit cheeky considering where I'm posting!) to try and increase savings in other areas etc. I'm cancelling my mobile contract to swap to PAYG. I've also noticed a couple of cc accounts on my Credit Report are still showing as open when they were settled over 6 months ago, so I've written to Equifax and will write to the other two to properly close these.

And now a bit of a question really about the best way to go from here. Everything I owe should be showing in the sig below if I filled it in properly. Was thinking about seeing if I could move my loan from Natwest to somewhere like Northern Rock or A&L to reduce the interest from 7.9% to 5.8 or 6.1(assuming I can get that rate) but wasn't sure whether the best idea was to just get the same amount as the loan (£6397 according to my online banking), or the loan plus the existing card (which is 15.9%).

I'm then going to cancel my Egg Card as I've just been accepted for Egg Money, but I plan on charging this one up with money to pay bills and get the cashbacks and interest but avoid going into the credit area (which I know is easier said than done, but my survival instincts kick in when the balance gets nearer 0 which will hopefully stop me going into the red too much!) So is this a fairly sensible idea or a terrible one and should I just keep them separate?

I'm planning on putting £400p/m towards the debts (I also get commission but this is my 1st month so I won't get any and I'm not sure what it will be regularly yet so not counting it at all, if it does turn up I'll probably put it straight toward the debt as it's money I won't miss cause I'm not used to it!)

I think my task for my first wage at the end of March is to clear the catalogue (29.4%! thank goodness its only been on there a month!) and my overdraft, pay my loan payment (£140) and throw the remaining £60 at my Egg Card. Then it's just a case of whether to keep the two remaining separate or merge them which is the bit I need some advice on! (and of course if anyone can see any better ways to go about it!)

CLAPTON

A little bit complicated but I would strongly suggest you post a Statement of Affairs...if you have been lurking you know the format but just to repeat

If you browse the bulletin board you will see examples but the general format is

: statement of income:

: statement of expenditure
this should be quite detailed but excluding debt repayment
: a subtotal to save us all having to add it up

: statement of all debts including
outstanding amount, monthly repayments , APR's
a subtotal to save us having to add it up

also add a brief details of you situation, partner, any children, rent or own property, value of house and mortgage, any special circumstances that are relevant

As far as the debts are concerned the principles are :
: pay back the debts with highest APR first (paying only the minimums on the other loans).
: do not consolidate loans into long fixed rate loans
: obviously if you can transfer to a lower rate AND pay off earlier then thats good.
Perhaps if you repeat the
debt amount, APRs and monthly payment in a simple format it would be easier to read

sanfrancisco

Hey there,

You sound like you know what your doing, but we all need a sounding board from time to time.

The key to getting debt free is not to worry how many debts you have, just that you have as much debt as possible on a lower % as possible. I know, I Know it is VERY TEMPTING to just have one outgoing, but this is not very MSE is it?? So...why dont you get a 0% card, or a low life of balance card? Apply for 2 or 3. Unless you are very very good I always think it riskly to get a loan plus a little bit more as this is where the mess tends to start.

Well done you seem to be doing really well.

linniestorm

Yep, sorry clapton, it was a bit garbled!!! Here's a SOA, hopefully a bit clearer!

Income - Monthly

Wage - £978

Expenditure - Monthly

Rent etc. - £175
Bus Pass - £60
Mobile - £15
B/band - £15
Groceries etc. - £120

Subtotal - £385

Debts

Natwest Loan - 7.9% - £6397 outstanding - £140 p/m payment
Egg Card - 15.9% - £647 outstanding - £25 p/m payment
Overdraft - 0% - £150
Catalogue - 29.4% - £50 outstanding - £25 p/m payment

And my situation is pretty simple now I've moved back up north, living with parent, no house, no car, no kids!

linniestorm

sanfrancisco wrote:

Hey there,

You sound like you know what your doing, but we all need a sounding board from time to time.

The key to getting debt free is not to worry how many debts you have, just that you have as much debt as possible on a lower % as possible. I know, I Know it is VERY TEMPTING to just have one outgoing, but this is not very MSE is it?? So...why dont you get a 0% card, or a low life of balance card? Apply for 2 or 3. Unless you are very very good I always think it riskly to get a loan plus a little bit more as this is where the mess tends to start.

Well done you seem to be doing really well.

thanks sanfrancisco, sounding board is exactly the right term, it's much easier to run things past people who can think of implications you hadn't! That was my aim in the past, e.g. 1 payment p/m is better than 4, but you are right of course about the interest. will investigate that!

CLAPTON

ok
if you really have £600 free each month then
pay off catalogue asap
pay off egg asap
is the overdraft permanenetly 0%? if so no rush to pay that of otherwise prepare to pay off once rate rises.

Nat west loan
need to know monthly payment (£140 per month? ) and how many months left to clear the debt?
also phone natwest and find out how much it will cost to pay the debt off (ask for it in writing)
depending upon result it may be best to coontinue paying to completion or to get a cheaper loan elsewhere
In any event if you have £600 per month spare you're not in bad shape.

roswell

First off with £400 a month to chuck at debts i wouldnt get another loan, As you have noticed pay the catalog first,.

After that if the OD is 0% or a lower % than egg pay egg off, In 2 months you would have egg and catalog clear in the 3rd you will have the overdraft clear.
your egg card is most likely 15% of higher.

Natwest loan next.

See if you can make over payments, if not try get a flexi loan.

Make sure you contact card issuers for the cards on your report that are settled get the accounts closed and wait a few months before applying for more credit, You May as well do this first then when you get to tackeling the netwest loan you will have less available credit whioch will give you more chance of getting another lower ARP loan or CC.

thyme_2

linniestorm,

Good luck with what you are trying to do on paying off your debts. Can I say that it also helps if you keep a small sum back from your income each month to use as a fall back sum for those occasions when you would perhaps have used your credit cards. If you can put by over the next few months the equivalent of your main bills this will act as a cushion. If you then have to spend over your budget say by #10.00 take it from that and then make sure that you deduct that amount from your next months pay. If larger than that then take a bit longer but ensure that you pay it all back to the same level asap. I am finding this quite a helpful thing to do myself and I don't charge interest!!!

fairylights_2

Morning linniestorm!

Looks like you're well on the way already! as has already been said, you can get the egg card and the catalogue paid off in the next couple of months, giving you all your energy to concentrate on that loan. I'd give them a ring and ask them for a final figure - what it would cost you to settle the whole loan today. And then work from that. If you can overpay, then get overpaying, if not, then start saving every penny that's spare to pay it off. If you can overpay, then you could be clear in just over a year (pardon my maths if I'm wrong!). It might well be worth trying to swap to a lower APR loan, but if you do, don't let them give you more than you need - that's what they all hope for!