what to do...consolidate loan or battle on???

stopthespends

hi all

at the mo ive got 15000 nationewide loan and 7k on credit cards.... im desparte to get rid of the debt and was thinking is it better to take a top up loan and get rid and know that i will be debt free in 5 years or continue to repay existing loan and credit cards ( which are 0% until december 09)...what worries me is :

1. impact my debt will have on remortage in nov

2. making the right choice

3. that when the 0% runs out will i be ablke to get another deal or end up paying 15- 24 % per card


help please.....im tempeted to consolidate


even thinking about adding it to my mortage

stopthespends

or would i be better to put on mortage and then reduce term and make extra payments?

i ve lost all focus of what to do...starting to freak out

Jenna

Hey there Louley,

First off - don't panic!

I shall update my post with more details in a minute, and I'm sure the experts will be along soon too (I'm blonde, so I don't count !) but just wanted to let you know someone was reading.

In the meantime, take a deep breath, and go and make yourself a cuppa. When you come back bet you'll have lots of clever replies xx

angelflower_2

I personally wouldnt consolodate or before you know it you will be even worse off. No guarantee you will get a loan or be able to add to the mortgage in this climate.

Have you posted an SOA before and looked at ways you can save money in the budget (ie the extra you would be paying on another loan) and thought about over paying the credit cards more quickly?

Best challenge for that is to make a Payment a Day thread. Its addictive and really helps.

Jenna

... right, to continue!

Firstly - an SOA would really help here. It's near to impossible to give you good advice without knowing your situation. The link for this is in one of the stickies at the top of the DFW board. That will also let everyone know the situation as to interest rates on the loans & CCs etc. It's great the CCs are all on 0% for now btw so well done there

By and large consolidation loans tend to be a really bad idea - these boards are full of people who consolidated and then ran up their CCs again ... so you'd need to cancel them all (except maybe one for absolutely dire emergencies) and cut them up. The emergency one you should give to your Mum or something (then you'll be too embarassed to ask for it back unless it really is something important!).

Financially speaking of course the lower interest rate you pay the better - so my initial reaction is don't make a decision yet re consolidation loans vs. CCs but just really focus on paying down the CCs over the next 8-9 months. If you pop your SOA up you'll get loads of ideas on how to squeeze every last penny out of your budget!

I'm no expert, but at a guess, I'd say your debt will certainly have an impact on your remortgage - but not sure that whether it's CC debt or loan debt will have any real bearing on the issue?

I'm not a homeowner but my understanding re mortgages is that the main issue is the amount of capital you have in the property vs. the % of the property value that you need to borrow e.g. it's important whether you need a 50% or 70% mortgage (for example)! It would be good to know approx. figures re mortgage (if you're not comfortable with the £ amounts, that's fine, just say you have a 45% mortgage or whatever it is and that will be a good guideline).

As to making the 'right choice' - you already did that by recognising that you want to pay off your debts ... in fairness, there is no perfect option (and no one can predict the future), you just need to do some research and then do your best to work with what you have.

Maybe you can apply for another 0% card (or low life of balance CC) in, lets say, September? Then if you get it, great - if not, you still have 3 months to apply for a loan?

Adding it to the mortgage is a very, very slippery path. I would caution strongly against this one - not least of which because it's turning unsecured debt into secured debt. I am not great at maths but I do remember an article that Martin wrote about this topic and it works out really, really expensive (as even though your interest rate is lower, over 25 years, you pay £££s in interest!). I am sure someone on here can work it out for you - or you may be better than me at figures

In terms of reducing your mortgage, you may find it better to focus on the debts first (one thing at a time!) but by all means check out the MFW board for lots of support on that front.

I've subscribed to your thread - will pop back with comments on your SOA when it's done xx

Numpty_Monkey

I would advise against consoladating
and no way should you turn an unsecured debt into a secured debt

Jemima09

I wish I'd never consolidated, I did it the first time to reduce my monthly payments, even though I could actually afford to cover them (I just had to live more frugally which I couldn't be bothered to...)

8 years down the line and I'm now signing on to a DMP because I've consolidated a couple of times since, and used the cards again, and now I can't afford to pay all the minimums.

So I'd really advise against it unless you're absolutely certain you're going to close all other credit card accounts.

With the cards being 0% though, I'd go with the idea of trying to pay as much of these off as possible, and look for another 0% rate to transfer to when it runs out (and then close the old card! again, something I never remembered to do!)

stopthespends

thanks all you are so kind xxx

i have posted this soa before and have made some adjustments...sorry if its made it a mess

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 0
Benefits................................ 110
Other income............................ 0
Total monthly income.................... 1910
Monthly Expense Details
Mortgage................................ 580
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 78.13
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 18
Telephone (land line)................... 24.5
Mobile phone............................ 40
TV Licence.............................. 11.95
Satellite/Cable TV...................... 5
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 20
Petrol/diesel........................... 30
Road tax................................ 11.6
Car Insurance........................... 27
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 30
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 10.17
Contents insurance...................... 0
Life assurance ......................... 21.94
Other insurance......................... 15.8
Presents (birthday, christmas etc)...... 15
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses..................
ts
Cash.................................... 400
House value (Gross)..................... 145000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 600
Total Assets............................ 147500

Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 90000....(580)......5.15
Total secured & HP debts...... 90000.....-.........-


Unsecured Debts


Description....................Debt......Monthly.. .APR
HSBC loan............................283.......finshes april 2010

Lloyds TSB card................0%.........65........3000

cap 1..........................0%.........55.24.....2000 -
nationwide loan................15000.........261.......0 - 4 years left
HSBC Gold......................2244......4% for 6months
Monthly Budget Summary
Total monthly income.................... 1,910
Expenses (including HP & secured debts). 1,128.59
Available for debt repayments........... 781.41
Monthly UNsecured debt repayments....... 699.71
Amount left after debt repayments....... 81.7
Personal Balance Sheet Summary
Total assets (things you own)........... 147,500
Total HP & Secured debt................. -90,000
Total Unsecured debt.................... -6,722
Net Assets.............................. 50,778

TurnaroundSue

Hi Louley - I wouldn't recommend consolidating either as this doesn't really help you to confront your spending habits and what you need to do to change them.

I agree with Jenna, put up your SOA and all the brilliant peeps on this board will be able to see how you can reduce your outgoings. Have you tried ebaying, car booting, doing surveys, mystery shopping etc to boost your income (Look on the Up Your Income thread and see how you can make extra money) then throw all this at the credit cards and you will soon see them come down.

Alot can happen in 8 months, this time last year nobody could have predicated we would be where we are now, so I think the advice is good in trying to get as much as your debt cleared between now and when you come to re-mortgage as this will stand you in better stead - if you consolidate now, you will still have a big debt in December and this might hinder your re-mortgage chances anyway! Whereas getting yourself in a better financial position by paying off as much as you can on your cc can only help your situation.

Good luck and I look forward to hopefully seeing your SOA shortly.

ps sorry, you posted your soa whilst I was still typing - oops!

TurnaroundSue

louley wrote: »

thanks all you are so kind xxx

i have posted this soa before and have made some adjustments...sorry if its made it a mess

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 0
Benefits................................ 110
Other income............................ 0
Total monthly income.................... 1910
Monthly Expense Details
Mortgage................................ 580
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 78.13 Is this over 10 or 12 months?
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 18
Telephone (land line)................... 24.5 This seems high
Mobile phone............................ 40 Ditto
TV Licence.............................. 11.95
Satellite/Cable TV...................... 5
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 20 Maybe need to do without for a while
Petrol/diesel........................... 30
Road tax................................ 11.6
Car Insurance........................... 27
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 30
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 10.17
Contents insurance...................... 0 You should really make allowances to pay this
Life assurance ......................... 21.94 This seems rather high?
Other insurance......................... 15.8 What's this for?
Presents (birthday, christmas etc)...... 15
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses..................
ts
Cash.................................... 400
House value (Gross)..................... 145000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 600
Total Assets............................ 147500

Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 90000....(580)......5.15
Total secured & HP debts...... 90000.....-.........-


Unsecured Debts


Description....................Debt......Monthly.. .APR
HSBC loan............................283.......finshes april 2010

Lloyds TSB card................0%.........65........3000

cap 1..........................0%.........55.24.....2000 -
nationwide loan................15000.........261.......0 - 4 years left
HSBC Gold......................2244......4% for 6months What rate does this increase to and when and how much is your monthly repayment on this card?
Monthly Budget Summary
Total monthly income.................... 1,910
Expenses (including HP & secured debts). 1,128.59
Available for debt repayments........... 781.41
Monthly UNsecured debt repayments....... 699.71
Amount left after debt repayments....... 81.7 Not sure this is a correct reflection as you haven't included a monthly amount in the figures above
Personal Balance Sheet Summary
Total assets (things you own)........... 147,500
Total HP & Secured debt................. -90,000
Total Unsecured debt.................... -6,722
Net Assets.............................. 50,778

Hi - Me again! There isn't really much you can do to trim back on your monthly outgoings, but what really stands out is the landline (I think this could be halved) and the mobile phone. Is your mobile a contract one? If so ring your provider and see if they can reduce your package, or try and get a sim only card as you could half this amount and still have loads of minutes and unlimited texts.

The only other thing I would ask is if you really need your car - could you manage on public transport for a while and then use all the costs relating to car expenses could be thrown at the ccs and then when you are in a better position may be could then think about getting a car then. This would automatically give you £1500 from the sale of your car and then you would have around £70 pm extra to put towards them also. I also notice that you haven't taken into account servicing, tyres, MOT etc.

Sorry if this sounds really harsh, as I don't mean it to come across as so, but just am trying to see how you can reduce your monthly repayments and help get down your debt by December.

Good luck!

stopthespends

thanks so much for your reply.

the telephone bill incs the internet... ive tried to reduce it but if i do the deal ive got for the internet will rise loads..

the buildings and contents is 10 together

the other insurence is for my nursing union

hsbc card increases to 24% dont know what the payments are at 4% as have only just got the deal.....at 24% i was paying about 30 i thnk

council tax is over 10months

mobile is now down to 30