I can afford my repayments - but would like them to be smaller!

megwump

Hi all,
I currently have debt of around £14k which I'm paying back as follows:

Roughly 350 per month towards a debt of 6500 @ 11.4% (personal loan - fixed payments)
Roughly 130 per month towards a debt of 5500 @14.94% (credit card)
Roughly £25 per month towards a debt of 25 @0% (bank of mum and dad)

I'm paying out £500 per month and have based the credit card and Mum&Dad loan payments on a snowball calculation (from the whatsthecost website), so I'm minimising the interest I pay.

The credit card company have reduced my interest rate to this level after I phoned them and asked them to (I've done this twice now - it's down from 21.9% a year or so ago to the current rate).

I was turned down for a loan in September last year when I was considering consolidating the debt. I appealed and it turned out I had something like one late payment.

I have one late payment in my credit history for the past 6 months.

I can afford what I'm repaying and, on current levels and by adjusting my credit card and M&D Loan payments slightly each month, I will be debt free in roughly 3 years.

Ideally, I'd like to a) reduce the interest I pay and b) reduce the amount I pay out each month without compromising on the 3 years.

Also, I checked my credit score in June/July with CreditExpert and got a very nice score of 999 - based on the fact that I'm using the credit available to me and making my payments.

However, I'm on my third address of the year, not on the electoral roll at my new address (yet), and did apply for a balance transfer credit card but didn't pursue it because they wanted me to post lots of documentation and it sounded slightly 'off' - so there's a search showing up on my records.

I was wondering if it would be worth me doing a balance transfer to a better deal (and if I've compromised my chances of being accepted for one) or if there were any other alternatives for me reducing my monthly payments?

GeorgeUK

First thing you would need to do is to get on the electoral roll at your address - this can have a big impact on your credit score. They may say your credit score is 999, but they don't take into account the little things like your wage. I would just ignore whatever they say about your score.

The only thing i can think of to reduce both the payments and interest rate is a life of balance card instead of a 0% one. When i have had a LOB offer, the monthly payments are less than the credit card minimum.

milliemonster

megwump wrote: »

Hi all,
I currently have debt of around £14k which I'm paying back as follows:

Roughly 350 per month towards a debt of 6500 @ 11.4% (personal loan - fixed payments)
Roughly 130 per month towards a debt of 5500 @14.94% (credit card)
Roughly £25 per month towards a debt of 25 @0% (bank of mum and dad) is this correct? then you only have one payment left? or should this be 2500?

I'm paying out £500 per month and have based the credit card and Mum&Dad loan payments on a snowball calculation (from the whatsthecost website), so I'm minimising the interest I pay.

The credit card company have reduced my interest rate to this level after I phoned them and asked them to (I've done this twice now - it's down from 21.9% a year or so ago to the current rate).

I was turned down for a loan in September last year when I was considering consolidating the debt. I appealed and it turned out I had something like one late payment.

I have one late payment in my credit history for the past 6 months. this may affect you getting a good deal at the moment, was this on your credit card or loan?

I can afford what I'm repaying and, on current levels and by adjusting my credit card and M&D Loan payments slightly each month, I will be debt free in roughly 3 years.

Ideally, I'd like to a) reduce the interest I pay and b) reduce the amount I pay out each month without compromising on the 3 years. I don't think you will be able to get a better deal on your loan, that is a good rate for a personal loan at the moment

Also, I checked my credit score in June/July with CreditExpert and got a very nice score of 999 - based on the fact that I'm using the credit available to me and making my payments.

However, I'm on my third address of the year, not on the electoral roll at my new address (yet), and did apply for a balance transfer credit card but didn't pursue it because they wanted me to post lots of documentation and it sounded slightly 'off' - so there's a search showing up on my records.

I was wondering if it would be worth me doing a balance transfer to a better deal (and if I've compromised my chances of being accepted for one) or if there were any other alternatives for me reducing my monthly payments?

How much of your available credit are you using? by this I mean how much credit do you have available to you at the moment and how much of this do you owe?

It sounds like the BT you applied for did want further checks to verify your identity and address esp if you are not on the electoral roll, you need to get on this before you apply for anything else or you will most likely be refused.

megwump

Oops - a couple of mistakes there

1. The Mum & Dad loan is 2250, not 25!
2. It's not a late payment, it was an overdraft fee from an account I rarely use (it was due to a payment being taken from that account in error, ironically is was CreditExpert and they've agreed to investiage ponying up the money I was charged as a result!)

I've just phoned Electoral services and I am on the electoral roll already - I thought I'd registered at my old address, but I'm more ahead than I thought

A life of balance card sounds like the best idea for getting the credit card payment down. I haven't tried to renegotiate my loan at all because I know it's a good rate - I got it about 2 1/2 years ago. I'll do some searches for the best deals on this and other sites and see what's available at the moment.

Sounds like there's not much more I can do - I just want it to be gone! I don't have an active credit card, or any savings (sadly) and just want to get into a position where I can start to save some money. I might have to think about getting a lodger or second job and just throw that extra money at my credit card (plus I have no social life right now, so an evening job would probably be a good way to meet people!).

megwump

milliemonster wrote: »

How much of your available credit are you using? by this I mean how much credit do you have available to you at the moment and how much of this do you owe?

It sounds like the BT you applied for did want further checks to verify your identity and address esp if you are not on the electoral roll, you need to get on this before you apply for anything else or you will most likely be refused.

Technically my credit card limit is £6300, but when my card expired they didn't renew it, so the credit available is increasing as the balance gets paid back. I should probably phone the CC company and get them to reduce my limit down nearer to the existing balance, otherwise it's credit available that I can't actually access. I know someone else who has loads of credit available to them but isn't using it and their score is worse than mine because they wouldn't be able to afford repayments if they maxed out, so I don't want to have an available credit limit that's miles away from my actual balance.

GeorgeUK

Careful with that.

They will look at tha amount available compared to the amount used and someone using 95% of their available limit may seem to be more in need of credit and a greater risk than someone using 70% of their limit.

It's not easy this balancing act...

megwump

Ah, ok - that makes sense. I'll leave the credit limit where it is then, it's only a gap of about £800 at the moment. I've just moved house, so have updated Credit Expert today, will check tomorrow to see what % of my credit I'm using (currently showing as 0% and 0 debt while they update my account - I wish!).

milliemonster

Actually, even though you owe 5500 and the limit is 6300 on your credit card, thats still classed as quite near your limit, to get below 70% you would need to get the balance down to 4410, I think until you get your balance owing down to around this you won't get a great deal on any new borrowing. You are using just over 88% of your available credit at the minute which any new creditor is going to wary of lending at that rate

megwump

Well, I've done two credit card applications for a balance transfer. Virgin turned me down and Barclaycard have asked for more info (suspect that's partly related to getting more identity info as I've not been living here long).

Fingers crossed I can make progress on getting my interest rate down - the Barclaycard offer is 6.9% for life of the balance, which would save me in the region of £1k in interest

If Barclaycard say no then I'll just have to suck it up and keep paying it off as it is for at least another 6 months, I don't want too many searches on my credit report.

megwump

So, nearly a year on and things have changed a little and I've had one slip up - but it's good news as well as bad...

I did a balance transfer to Barclaycard, but have committed the cardinal sin of spending on it! Plus the max I could transfer was £5k (to qualify for the 0% repayment period) so I am now paying back two cards. This is how it breaks down:

Barclaycard, balance: £6207.25
Of which: £3146.97 is interest free and the rest is at *I think* 12.9% - but I can't seem to find out what it is when I log in - on my monthly statement it says it applied at rate of 0.982% to the standard balance. The interest free period expires in November.

Halifax Credit card, balance: £316.93
Rate: 14.9%

Personal loan, balance: £3925.55
Rate: 11.9% - fixed payments of £344.56 each month (so only a year left)

Mum and Dad, balance: £2185.28
Rate: 0%, payments not at all fixed

Total: £12635.01

If I put that into the snowball calculator (at whatsthecost.co.uk) as 5 debts not 4, so I can account for the interest free part of my credit card it tells me that it will take me 26 months and pay 1383 in interest.

I would dearly love to reduce this further and have fewer payments going out. I think I've made a lot of progress BUT! It can always be made better.

Any tips?

GeorgeUK

I would try to clear the halifax card asap. You may be offerred a 0% or life of balance transfer deal as an existing customer. It may take a month or two to come through though.

Other than that, just keep throwing the extra at the highest APR (and stop using the cards )