Loans and Consolidation

mrslawrence2003

Hi there,

I've just been out of work for a couple of months and as a result have a huge overdraft - this on type of already existing loans and credit cards - they balances are as follows:

Student Loan £9,499.08 £172.43 3.20%

Barclaycard £1,808.00 ?1 ?
Platinum £2,900.00 £58.00 7.70%
Egg £1,870.00 £38.91 14.88%
Lloyds Loan £3,452.33 £192.36 7.8%?
Egg Loan £11,139.00 £213.96 7.70%

O/draft £5,000.00 15.30%

Total All debts £35,668.41 monthly payment - £835.66

Now whilst with my new salary we can just about afford to pay this, clearly it would be much better if we can reduce the monthly payments and get some savings behind us (my health is quite poor and it's likely that i will be off work somewhere in the not too distance future and as i will be on a trial basis for next 6 months could be a bit of a sticky wicket etc)

any advice on how best to tackle this?

CLAPTON

reduce your spending as much as possible and pay the minimum payments on all debts except that with the highest APR (your overdraft?) use all spare money to pay that off.

if you post a Statement of Affairs (SoA) here, i'm sure people will be able to offer suggestions for reducing spending

http://forums.moneysavingexpert.com/showthread.html?t=107280&page=1

mrslawrence2003

CLAPTON wrote:

reduce your spending as much as possible and pay the minimum payments on all debts except that with the highest APR (your overdraft?) use all spare money to pay that off.

if you post a Statement of Affairs (SoA) here, i'm sure people will be able to offer suggestions for reducing spending

http://forums.moneysavingexpert.com/showthread.html?t=107280&page=1

i've already reduced it as much as poss - incl trying to renegote my rent with my landlord.

also forgot to mention - the barclaycard debt is not mine and it has been defaulted on since 1999 - giving him a bad credit history. we need to clear this debt asap so that we can get it off his credit report with equifax and experian asap and hopefully try and improve his credit rating to the stage where we can get a mortgage. i guess that will take a couple of years tho

Bestthingsinlifearefree

Hi MrsLawrence,

2 tips which you may know already.

1)Snow ball the debts ie throw the most money at the debts with the highest interest rate first and pay the minimium on the rest (I think there is some threads on snowballing / snow ball calculater etc on the site some where).

2)Can you get apply for any 0% interest rate cards or balance transfer onto low interest rates (ie do not take out any more credit / debt but move your existing debt onto lower rate cards etc).

Hopefully your health will hold up and you will be well and successful in your new role.

Look after your self and I know its easier said than done but try not to worry to much as this in itself can impact on your health etc etc.

Good Luck. I wish you well.

alecpr

Just as a starter for ten, I'd keep savings fairly minimal and conentrate on your debt. I believe Student Loans are only paid when you can afford it and it's quite a low rate, so I'd pay the minimum on that as they should be understanding if the worst should happen.

Then the obvious stuff:

1) Get a 0% Credit card and fill it up to it's limit with the higher rate cards debt.
2) Get a regular bank loan, which should be around 6.x% in order to clear the rest and minimise the payments.
3) Tear up the unused credit cards.
4) Throw all your spare cash at the debt, starting with highest rate frst, to clear it as soon as possible. Help with this will require the usual breakdown of your spending habits and income.

You don't sound like you have problems with bad credit or refused loan/credit card applications, if you do things change slightly in that you use the credit you have available to you, using the lowest rate cards to their maximum affect. Step 3 and four remain the same :-)

Bestthingsinlifearefree

Could you move your current account onto a better interest rate for your overdraft (ie change banks ??) or balance transfer that overdraft somewhere else (if you know what I mean)

15% on the overdraft thats a lot of interest to be paying.

mrslawrence2003

Bestthingsinlifearefree wrote:

Could you move your current account onto a better interest rate for your overdraft (ie change banks ??) or balance transfer that overdraft somewhere else (if you know what I mean)

15% on the overdraft thats a lot of interest to be paying.

the overdraft is the first thing i want to deal with - the interest is quite high and the only reason i have the overdraft is because i had nothing else to live on for the past few months! (very frustrating as had already cleared it right down once)