I need help

glitterlea

This is my first time on this board and I am looking for some advice.

I have an outstanding loan for £12,000, which has a hideous interest rate of 17% on it, plus I have some credit card bills.

I have always kept up with my payments but last year, me and my other half bought our first house together and now I'm struggling
I really don't know what to do or where to turn.. I've tried to apply for a lower interest loan to pay off my current loan but got rejected.

I know there are probably lots of other people in a similar situation but at the moment I feel so alone and scared.. I really don't know what the best thing to do is.

I'd appreciate any help

Tixy

Hi Glitterlea

Welcome to the DFW board. You are not alone. Most people find their way to this board when they are struggling so we all know what it is like.

The best way we can advise and help you is if we know more about your situation. It would help if you post a financial statment of affairs using this link. http://www.makesenseofcards.com/soacalc.html
Format for MSE at the bottom and post on this thread. Then we can see how you can free up enough money to pay your debts or what action to take if your expenditure exceeds the income. We may be able to suggest ways you can save money or where you can maybe cut back.

Welcome along and good luck.

slig

First of all, you're not alone anymore. All the lovely people here will help you get though this. Once you take control of the situation you will almost definitely feel a lot less scared too. Does your partner know the full extent of the debt? Is he/she supportive?

http://www.makesenseofcards.com/soacalc.html Please can you post an SOA using this link (format it for MSE)? It will help people get a better idea of your situation.

glitterlea

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1031
Partners monthly income after tax....... 990
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2021
Monthly Expense Details
Mortgage................................ 316
Secured/HP loan repayments.............. 0
Rent.................................... 236
Management charge (leasehold property).. 0
Council tax............................. 109
Electricity............................. 25
Gas..................................... 25
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 16
Mobile phone............................ 23
TV Licence.............................. 15
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 280
Clothing................................ 0
Petrol/diesel........................... 80
Road tax................................ 18
Car Insurance........................... 23
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...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1233

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

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 56000....(316)......0
Total secured & HP debts...... 56000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................12000.....300.......17
credit card....................3000......90........0
credit card....................1200......30........0
Total unsecured debts..........16200.....420.......-

Monthly Budget Summary
Total monthly income.................... 2,021
Expenses (including HP & secured debts). 1,233
Available for debt repayments........... 788
Monthly UNsecured debt repayments....... 420
Amount left after debt repayments....... 368
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -56,000
Total Unsecured debt.................... -16,200
Net Assets.............................. -72,200
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using IE browser.

Tixy

Hi Glitter

The first question is you are showing a surplus of £368 based on making the minimum payments - do you only pay the minimums or have you been making overpayments from this surplus. If no overpayments then do you know what the surplus is being spent on? If not I'd recommend a spending diary where you write down every single thing you spend for a couple of months (50p or £50).

Then if you can identify where this money is going you may well be able to put some of it towards your debts instead.

Looking at your expenses - water is a high amount I guess its unmeasured - look into having a meter fitted you could save about half of this amount.

Groceries are high for 2 of you - try cutting back by doing the drop a brand challenge, cook from scratch, meal plan and check out the oldstyle board for loads of advice (maybe aim for £200 to start but you could do this for £150 if you need to)

You have put nothing for car maintenance, presents, haircuts. You should include this by estimating the total annual spend and then budgeting 1/12 each month - otherwise when the time comes to pay them its too easy to put them on a CC.

Allow yourself a small budget for entertainment each month and once you;ve spent it then stop going out until next pay day.

To tackle your debts you should overpay on whichever debt has the highest interest rate (are your CCs actually 0% or do you not know what they are). If 0% see if you are allowed to make overpayments on the loan. If you clear debts in the order of the interest rates you will minimize the interest paid and speed up your debtfree date.

Good luck

Tixy

What is your credit rating like? It may be worth looking to see if you can move the loan to one at a much cheaper rate - at £12k you should be looking for anything from 8%-12% which could save you considerably in interest (check you can early repay on your loan first). If you haven't applied for new credit for a few months you could try to apply for 1 or 2. (Don't keep applying over and over though as this can affect your credit rating).

You could look for some advice on the loans board about which loan company to try.

dancingfairy

Hi. I would agree with Tixy - you should be able to cut the food bill a bit - I would aim for 200 if you can and then maybe try and go as low as you can.
Have you got a local credit union ? it may be worth enquiring to see if you can get a loan at a lower rate of interest?
I would also agree with the spending diary - it's scary when you write it all down but at least you know where it is all going then and where you can cut down on things.
df

slig

glitterlea wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1031
Partners monthly income after tax....... 990
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2021
Monthly Expense Details
Mortgage................................ 316
Secured/HP loan repayments.............. 0
Rent.................................... 236
Management charge (leasehold property).. 0
Council tax............................. 109
Electricity............................. 25
Gas..................................... 25
Oil..................................... 0
Water rates............................. 42
Telephone (land line)................... 16
Mobile phone............................ 23
TV Licence.............................. 15
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 280 Some room to cut back here - could aim for £200, then you might find there is still room to cut back even further
Clothing................................ 0
Petrol/diesel........................... 80
Road tax................................ 18
Car Insurance........................... 23
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...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 Never? What about Christmas? Work out your yearly spend and divide it by 12.
Haircuts................................ 0 Never?
Entertainment........................... 0 Nothing?
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1233

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

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 56000....(316)......0
Total secured & HP debts...... 56000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................12000.....300.......17
credit card....................3000......90........0 Are these actually both 0%?
credit card....................1200......30........0
Total unsecured debts..........16200.....420.......-

Monthly Budget Summary
Total monthly income.................... 2,021
Expenses (including HP & secured debts). 1,233
Available for debt repayments........... 788
Monthly UNsecured debt repayments....... 420
Amount left after debt repayments....... 368 This is a good amount. But do you actually see all of this?
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -56,000
Total Unsecured debt.................... -16,200
Net Assets.............................. -72,200
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using IE browser.

What's your plan of action going to be? If you are paying interest on your credit cards I personally would be tempted to overpay on them first and get rid of them, then you can just concentrate on the loan, for me I like the reward of paying something off as it's good for morale! That may not be the most money saving way to do it though.

Can you get a loan with a lower interest rate, perhaps with a slightly higher monthly payment and shorter term?

Try playing around with the snowball calculator to work out your debt free date, and to see how you can get that date to be sooner.

Ames

Why are you paying both a mortgage and rent?

glitterlea

Ames wrote: »

Why are you paying both a mortgage and rent?

Our house is 'affordable' housing so we own a share, which we pay mortgage on and then pay rent for the other share to the housing people.

Ames

Ah right, just wondered. That makes sense though!