Need your advice - GF in debt

In_it_for_a_£

Hi everyone, I'm on here to see if any of you excellent moneysavers can help out by giving me some advice.

Here's the story:
I'm living with my girlfriend who after we started going out told me that she had a few debts to pay off. Loans and Credit cards.. She said it was always her problem to sort and didn't want me involved however I feel the need to.
She's everything to me and I see that this underlying problem gets her down from time ot time. So, I think I need to help out and support her.

Her debt comprises of
£15k loan @ 6.9%
£11k Credit Card @ 18.5%

My understanding is that she pays about £300 to the loan and £250 to the CC per month. Of the £250 on the CC about £150 is interest. Shocking!

We recently bought a house together and have the usual associated bills.
But she can afford about £600 to pay off her debts each month.

The obvious route would be to identify a low rate loan and tranfer the funds to that although when she went to the bank to enquire about this the advisor said that because the households combined outgoings (that being our joint mortgage, council tax, elec, gas etc) along with her existing loan and CC payments was more than her income that she would be unable to apply for a loan as her credit scoring is poor for the above reasons.

I have a reasonable salary and no significant debt, no credit card and would think a decent credit score (however I did read one of Martins notes on joint liability for household debt. Is my credit score going to be affected by my girlfriends if we are at the same address?). I'd like to get involved and perhaps help out with transfer to a low rate loan on my name.

I hope I have supplied sufficient info to spawn ideas. I really want to help but want to explore all the options and get all the advice I can.

What can she do?
What can I do to help?
Any advice or experiences?

Thanks for your time to read this, and in anticipation for any response.

keith_lard

Pretty sure you would be affected, but only if she has defaults ???

If No, use both your heads and work on a plan to get debts into 0% accounts, I belive this can be done!

Get a spreed sheet sorted and update it every month. They do work!

it's up to you what debt you place in your name that is hers, but two heads work better!

You both can do it if you stick to a spread sheet!

GET DEBT FREE!!!! BETTER ALL ROUND IN LIFE.


Regards

K.

southernscouser

Firstly I would say DON'T get any credit for her in your name!

I know you think you will be together forever and I hope you are but to me it's more hassle than it's worth.

Was the £600 on top of what she pays currently?

To be honest we will need a full SOA to get a better understanding of whats going on. Have a look at this thread for a guide!

OberonSH

Hi, welcome to the board.

Really you need to post a SOA to let us she where she spends her money, to see if she can free up aythng else to throw at the debt, if she's unable to balance transfer. See the sticky at the top for hints on how to do this.

I read recently that a few people called their card people, and asked if there was a better rate available, as they were thinking of leaving - usually you get a lower rate for a time. This might be worth a try to get that interest down a bit.

In_it_for_a_£

no the £600 is what she pays towards the debt. There is little more than that can go towards repayment.

The interest on the loan is also front loaded.

I'll work on the SOA and get something back soon.

Thanks for the posts

nearlyrich

In_it_for_a_£ wrote:

I'll work on the SOA and get something back soon.

Does your GF know you have posted on here? Is she committed to getting out of debt?

Good luck it isn't easy helping someone else get out of debt.

In_it_for_a_£

She doesn't know, but is committed to getting out of debt.
I am only trying to help out but she thinks she has looked at every avenue already. I know if we get some good advice on here and get our heads together that we can sort it out a lot sooner than it should take.

mountainofdebt

but she must have a reasonable credit score if you've just bought a house together.

I agree that a SOA needs to be posted before any real advice can be given but given that she has been accepted for a mortgage then there's hope that she could be accepted for a 0% card...there are golden rules that she would have to obey if she got a 0% card but we'll cross that bridge when we come to it.

The other thing that has been suggested - ie put the debt into your name - is also another possibility. However as already been mentioned this has pitfalls of its own. An alternative would be for you to perhaps pay more of the household bills so that she could concentrate on paying off her debts??

Anyway post the SOA and I'm sure we can sort somthing out.

scw1

I am £14k in debt (made up of £6k loan and £8k credit cards) and told hubby about it 2 weeks ago (he knew I was in debt but wasnt aware of how bad it was) anyway we had a long chat and it turned out I was paying back £349 per month on a loan and £350 on cc's. Anyway we disccused the various possibilites and we decided that for us the best thing to do was for us to take out a loan to consolidate all the debts. We got married in October and I moved banks from Natwest to Lloyds (he has been with Lloyds for 20years) and I had a quote from Lloyds for the loan and they wanted to charge me 10.9% interest however when he had a quote he got an interest rate of 4.2% (been told its due to his very good credit history, length of time with the bank, his age (he is older than me) and his employment) so he took the loan out for me and it works out I pay back £260 per month although its over 5 years which is longer than my original loan was for I am saving hell of a lot in interest. Anyway just wanted to say that it does depend on how you feel your relationship is with your gf. You must be pretty serious to have bought a house together but perhaps get something in writting to say if you split up she would still have to pay you back x amount a month for the loan? Again as others have said perhaps a loan is not the best solution but for me and hubby it was the best in our situation. Good luck and let us know how you get on!

halloweenqueen_2

She needs to tackle the highest interest debt first. I would agree with the other poster not to put the debt in your name. If you can shoulder more of the costs of living and put everything she can against the debts that would help. If she cannot get a 0% deal, perhaps she could get a low % on a life of balance card, this might be about a third of the 18% debt.
Would she be able to not touch her income except for paying off the debt?
I would scoot across to the moneysaving old style to be able to reduce your outgoings on groceries etc.
Has your GF stopped spending on cards?
Good luck to you both!

CLAPTON

essentially two ways of paying off debt quicker
firstly increase monthly repayment
secondly reduce intererst rate being paid
or of course do both

for the CC debt the APR of 18.5% is obviously rather high
if she continues paying £250 per month she will clear the debts after 74 months (i.e. 6years 2 months)
if she could pay £300 per month this would reduce the time to clear to about 54 months (4 years 6 months) which is quite a reduction.
if she could pay £400 per month the debt would clear in about 36 month (3years).

if she could transfer to a lower interest rate then
at a rate of 6.9% (her loan rate ) and paying 250 per month the debt would clear in about 51 months (4 years 3 months)
at the same rate but paying £300 per month it would clear in about 41 month (3 year 5 months).
if she paid £400 per month then it would clear in about 30 month (2 years 6 months)
The biggest effect comes from paying more per month ragther than the interest rate but obvious both help (please check the mathes before making any decisions


so what you do depends upon your joint financial situation (how much spare income do you have ),
what your attitude to helping her either directly by giving her money to pay off the debt and/or transferring the debt to yourself ,
your own credit rating and whether you can get low interest loans or CC

and whether she and yourself can free up more money by increasing income (overtime , parttime job) and reducing spending (need a SoA) to comment further on that