One Loan or Loan, Credit card & Overdraft

quiche4

Hi All

Well things have gradually been getting out of control and now I have a decision to make and would like your help.

I have

Loan £11000 (just over)
Overdraft £2000
Credit card £4500

My question is should I leave them as they are or get one loan to cover the lot?

My credit card is at 0% until March 10, im not sure what the interest rate is on the loan but can find out when im at home and the overdraft is 0% upto £500 then it goes up after that. Im not sure how much it goes up to but can find out again when im at home.

Any advice would be greatly appreciated.

Cheers
Lorraine

Tixy

Hi Lorraine - you really need to find out the APRs before you can even think of answering this question.

Obviously I don't know your personal circumstances but you may well find it difficult to get a personal loan of £17,500. I certainly would think you may not get a good interest rate.

What was the £11k loan originally for? If it was a previous consolidation loan then just getting another larger one will not help you address your debt problems.

The problem with consolidating is that many people do this and then end up gradually reusing their overdraft or credit cards, so their overall debt just keeps increasing. Instead we advise people to carefully look at their financial situation to see if they are overspending compared to what they earn.

If you haven't already done so I'd suggest you fill in this budget http://www.makesenseofcards.com/soacalc.html so you can see truly see your position.
If you post it on here we may be able to advise on a way forward or may be able to make suggestions as to how you can save money.

GeorgeUK

I think it would be better to keep the debts as they are as you may not be able to make overpayments to a loan.

quiche4

Hi All,

I have done the SOA check it out below and let me know what you think. Any ideas welcome.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1250
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1250
Monthly Expense Details
Mortgage................................ 381
Secured/HP loan repayments.............. 0
Rent.................................... 197
Management charge (leasehold property).. 0
Council tax............................. 90
Electricity............................. 24
Gas..................................... 46
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 40
Mobile phone............................ 30
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 8
Groceries etc. ......................... 100
Clothing................................ 20
Petrol/diesel........................... 50
Road tax................................ 11
Car Insurance........................... 17
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 113
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 11
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 8
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 4
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1263

Assets
Cash.................................... 0
House value (Gross)..................... 65000
Shares and bonds........................ 0
Car(s).................................. 800
Other assets............................ 100
Total Assets............................ 65900

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 69500....(381)......0
Total secured & HP debts...... 69500.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan (LTSB)...........15363.....264.......10.7
Credit Card (Virgin)...........4500......20........0
Personal Overdraft.............2000......0.........18.16
House Overdraft................300.......0.........19.28
Total unsecured debts..........22163.....284.......-

Monthly Budget Summary
Total monthly income.................... 1,250
Expenses (including HP & secured debts). 1,263
Available for debt repayments........... -13
Monthly UNsecured debt repayments....... 284
Amount short for making debt repayments. -297
Personal Balance Sheet Summary
Total assets (things you own)........... 65,900
Total HP & Secured debt................. -69,500
Total Unsecured debt.................... -22,163
Net Assets.............................. -25,763
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

GeorgeUK

Mortgage................................ 381
Interest only or repayment?
Rent.................................... 197
{Almost half your income is going on these bills - that is why you are struggling so much}

Council tax............................. 90
If paying over 10 months, can you ask to pay it over 12?

Electricity............................. 24
Gas..................................... 46
Have a look at the comparison sites to see if you are getting the bes deal (uswitch, moneysupermarket). Also contact them with the meter readings and claim back any money if you have a surplus built up.

Water rates............................. 30
Is this metered? Do you have a water hippo to use less water in the cistern?

Mobile phone............................ 30
PAYG?

Telephone (land line)................... 40
Satellite/Cable TV...................... 0
Internet Services....................... 8
Is this a package deal?

Groceries etc. ......................... 100
Have a look at the oldstyle board for mealplan ideas and cooking in bulk.

Petrol/diesel........................... 50
Other travel............................ 113
Do you need a car as well as the other travel?

Contents insurance...................... 8
Life assurance ......................... 30
For all the insurances, i would look at the comparison sites.

Is it possible to get another job?
You need to either increase your income or reduce your expenditure. I don't think you will be able to live there unless you can perhaps take in a lodger. You are almost £300 short each month and your income does not cover your expenses let alone repaying the debts.

How have you been paying your debts so far and how would you intend to pay off this proposed loan?

quiche4

Hi GeorgeUK

Thank you for your reply.

The figure I have put as my salary is without overtime and mileage claims. I did that as they are not gauranteed although I am due to do quite a bit of overtime in the next few months.

My mortgage is interest only.

The council tax comes out of my salary so maybe I shouldnt have added that to the list. sorry, will go back and change that.

I will def go onto the comparision sites to see what I can get for the gas and electric. As I only live in a one bed flat I should be able to get it cheaper.

The water is on a metre already. I haven't heard of the water hippo thing. I will have a look into it and see if I can get one. Do you know where I may be able to get one free or cheap?

My mobile is on contract for another year but I will certainly look into getting PAYG when its up for renewal. I currently get unlimited internet, 1000 text and 200 mins for £25 a month on my mobile.

I think i might be tied into my telephone landline for up to 2 years but will def double check. The broadband is £8 because im with O2 for my mobile.

Will have a look at the oldstyle board for meal plan ideas thank you. I actually don't shop that often for food.

Travel is awkward. The petrol is an estimated figure as I will be going out a lot more for work but I get petrol money back from work in my salary at the end of each month. Should I then take this figure off? I very rarely use my car for me. The other travel is train & ferry fees. My partner lives on Isle of Wight so I have budgeted for 2 weekends in a month although sometimes I have been more often if there are things happening. I plan to rent my flat out and move to IOW in the next year or so.

I will check out the comparision sites for the contents insurance. Unfortunately I feel like I am unable to change my life/critical illness cover as I have been having tests for MS almongst other things. If I apply with other companies I will have to declare it and therefore may not get covered for it. Does that make sense?

I have a DD set up for my loan so have been paying for that and I have unfortunately started paying just the minimum for my Credit card. Unfortunately like you said until I start earning more I won't be abl to pay anything else off. I think I have another 5 years left on my loan.

Thank you for your help.
Lorraine

Tixy

Hi Lorraine - gas is huge for a one bed flat, mines only a bit more for a 3bed house.
Have the utility company been basing the cost on actual readings or estimates? Look through old bills at what you have been using each quarter. Would you say you are 'generous' with heating?

You should be able to get a water hippo (also called a water saving device or save-a-flush device) free from your water company (if you have a modern toilet with dual flush you don't need one). Check you water company website.

Ideally on your budget you should include just petrol that you pay for yourself, any that work re-imburse you for leave out. Same with council tax, if your salary shown is after ct then don't include again.

Is your house shared ownership? Is that why you have mortgage and rent? As George says this would appear to be the reason you are struggling, proportionally having this much of your income go on these areas is really high. Whenever anyone has these sorts of percentages they seem to struggle. Especially as your mortgage is interest only so you are not actually paying off the capital.

Do you have any idea how much you could get in rent for your flat? Would it cover the £578? You are showing slight negative equity at the moment but as you are not paying any capital off your mortgage won't reduce.
Could your OH not come to visit you more often, perhaps you could go there once a month and he could come to you once a month so that you are sharing the travel cost.

Even if you make some changes you are still going to struggle to balance each month.
I assume as its a 1 bed flat there would be no way you could have a lodger? Any chance you could increase your income, either do more hours or get a second job?