New & Needing Advice

seriouslyskint

Hi All,

I'm new to this site and really glad I've found it. I've stupidly got myself in approximately £20,000 debt. I will never use credit cards etc again as I have no need to, I've simply been over spending.

I earn £20,000 a year and live with my parent, but unfortunately I know have to move out, which means I won't be able to use alot of my salary to pay off my debts, which are as follows:

Tesco Loan, £10,000 (£12,000 with interest)
Asda Loan £5,000
Virgin Credit Card £3000
Overdraft £1500

Would the best option be to get a loan for the total of this over a long period, say 7 years to keep payments down?

Any help would be much appreciated.

Thanks,

Seriously Skint

BlueJeans_2

Hi

If you complete your statement of affairs then post it on here, there are loads of experts on here who can have a look at it for you.

http://www.makesenseofcards.com/soacalc.html

Also there is a snowball calculator (on the above site) that you find of use.

HTH
Blue

Tixy

Hi seriouslyskint

As Blue says it would help if you complete the statement of affairs in the link she has given so we have a better understanding of your financial position.

Usually on here consolidations are not recommended, as they are taken out over a long period of time, and often have high APRs they can cost much more in the long run. Also frequently people take out a consolidation loan but after 6months have run up new debts on credit cards again as a consolidation loan does not help us change our overspending habits. (I know you think you'll never use them again but we all thought that! Your cleared credit card companies will write to you with tempting offers to try to get you back into debt with them and it only takes one 'emergency' to tempt you back to a card).

Do you have any cards with low balances that would offer you good balance transfer APRs if you shuffle your debts?

Why are you having to move from your parents? Look for the cheapest alternative option for housing costs, consider house shares, lodging with friends or similar rather than renting alone as it works out much cheaper. Once you rent a place you will be stuck in a contract for some time (usually at least 6months) so do your sums first and don't move in if you can't afford to.

seriouslyskint

Thanks for your help so far.

My SOA attached. I have been given a deposit to buy a house so I really don't want to damage my credit rating with a dmp, but am finding it impossible to get a loan to consolidate.

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1279
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1279
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 50
Electricity............................. 30
Gas..................................... 10
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 12
Car Insurance........................... 79
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...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 5
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 626

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Overdraft.................2000......0.........19
Tesco Loan.....................1100......201.......11
Asda Loan......................2300......105.......0
Tesco Credit Card..............350.......30........15.2
Egg Credit Card................1750......45........17.9
Virgin Credit Card.............3500......70........16.9
Total unsecured debts..........11000.....451.......-

Monthly Budget Summary
Total monthly income.................... 1,279
Expenses (including HP & secured debts). 626
Available for debt repayments........... 653
Monthly UNsecured debt repayments....... 451
Amount left after debt repayments....... 202
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -11,000
Net Assets.............................. -10,000

Tixy

Hi and welcome back

Are you now living alone? Is this SoA just for you? are you in a house share (it helps to know to understand the bills).

You seem to have a car but have no fuel cost budgeted? Is your insurance really £948 per year? Is there anyway you could manage without a car and use public transport? Have you shopped around for car insurance?

You also have nothing budgeted for car servicing, tyres, MOT etc?

You are showing a surplus of £202 do you actually have that amount left over each month? do you know where you are spending it? If it is spare then are you paying more than the minimums on your debts?

Could you work overtime at work? or get a second job in the evenings or weekend to up your income? do you have any items you could sell to put towards your debts?

Have you stopped spending on the cards? are they all cut up (or all but one?) What is the limit on the tesco card? if you could clear that off in a couple of months then they may offer you a promotional rate to BT the egg card which would save you in interest.

How many loans have you applied for? usually its recommended to have no more than 3 applications in a 6month period as that can damage your credit rating. Have you checked your credit report? I expect you have been turned down because of your debt to earnings ratio. Did you ask why you were turned down?

How much of a deposit do you have? How soon do you intend to buy? If you used the deposit to pay off your debts you could then save what you had been spending on repayments to save up the deposit again, this way you would pay far less in interest.

bargainbetty

Sorry to put a dampener on things, but I have a stupidly small mortgage, and even then I am paying £580 per month. You are really going to struggle with a mortgage, as your bills are likely to be higher, if you end up in a flat rather than a house you will be looking at service charges too, and you will have to stump up for buildings and contents insurances too.

I agree with Tixy - maybe it would be better to pay off your debts and then become a hardcore saver.... you would pay a huge amount less if you could avoid the interest, and your credit rating and application status would be improved by having less debt.

These days, it's harder to get money out of banks (double edged sword there). If your SOA doesn't show you can afford the full repayment, they will reject you.

I wish you all the luck in the world, but think you might need to rethink your plans for a year or two.