Debt Advice

matt78

Hi Guys,

I'm trying to clear all my debt that I've accumalated over the last couple of years.

I have 3 credit cards with three different lenders totalling £18500.

Card One - £3000
Card two - £4000
Card three - £11500

I currently pay every month in total £365 which is really about the bare minimum to pay off, I know it'll take many years at this rate to clear the cards as this is why I'm looking for a loan to pay off all the cards in one go.

I'm looking to be debt free in 5 years, so I found acouple of lenders to pay off £18500 in 5 years which equalsto £353 each month. The lenders being either Lombard direct or Direct line.

My basic salary is £15500 but since working for this company I've never earned nothing less than £17500 due to continous overtime. I haven't taken into consideration the overtime as I know I should never rely on that.

What I would like to know is how lenders work out how much you can borrow depending on what you earn, or will lenders lend me the £18500 to debt consolidate know matter what I earn.

Thanks for any advice in advance.

Devo

I'd strongly suggest posting a full SOA before you consider getting a loan out. You need to realise why you are living outside your means and consolidating debts isn't always the answer. Sure, you may benefit from better interest rates, but you are not addressing the underlying problem. I have seen people get loans out to pay off existing debts and then they accumulate debt again on the cards they have just cleared - thus owing twice as much as when they started :eek:

matt78

Thanks for the reply, but whats an SOA.

CLAPTON

you say you have accumulated the debts over the last few years....have you now stopped accumulating the debts or are they still rising?
the big danger of getting a loan to replace CC is that you simply start using the CC again and you end up with a loan and CC debts ..but bigger this time....you say you haven't taken into consideration the ovetime (200) but does that mean that you are reducing your debts by at least the 200 per month..if not then you are living on that money.

best you address the basic spending problem before considering a loan.
why not post a statement of affairs here and see whether people can help with the spending
see
http://forums.moneysavingexpert.com/showthread.html?t=107280

Devo

Have a look at the 'First Time Posters' thread

---

> HERE
It should explain everything and allow everyone here to help you as best they can... :T

kenshaz

Statement of accounts,I hate jargon

matt78

People,

The debts have now stopped rising as I've realised the problems I was getting into.

I've cut up all my credit cards and made a sacrifice to sell my car to pay off a bank loan which I had been paying for the last 2.5 years which was where I was starting to struggle.

I'm living with parents.

Monthly Incomings:

My salary - £1,004 after tax.

Total - £1004

Monthly Outgoings:

Mortgage/Rent - £80
Council Tax - £0
Gas - £0
Electric - £0
TV License - £0
Sky £0
Phone - £25
Food - £75
Car Insurance - £0 (Paid in Full Already £218)
Petrol - £35
Life Insurance £free cover by bank account.

Total: £185

Debts - monthly

Alliance - leciester - £139 (£4100 7.4% Balance)
Cahoot - £45 (£2385 - 7.9% Balance)
Northern Rock - £82 (£4182 I'll have to find Apr %)
Barclays bank - £64 (£704 remaining I'll have to find Apr %)
Virgin CC - £75 min (£4000 owed 11.9%)
Mint CC - £75 (£3000 owed 11.9%)
Lloydstsb CC - £225 Min (£11500 owed 12.9%)


Like I said I the loan I've seen is 5.7% at £353 amonth (£18500) to clear my credit cards in 5 years which I know I can clear off but at the moment its a never ending future if I don't.

I've told my parents my situation but they're unable to help at moment which to be honest its mistake and I rather sort this out myself than take money of someone else to clear my problems.

My other loans I'm okay with, but I need to clear my Credit Cards which is my main priority and to have 1 lump sum every month makes it alot easier.

So any advice is appreciated.

Devo

It would also help if you could post the full balances of each debt and the relevant interest rates - this will help decide which debt(s) to tackle first

matt78

I'll get the use of this soon.

CLAPTON

the SoA needs to show absolutely everything you spend and are going to spend over the next year. to work out the 'normal' monthly spend try keeping a spending diary....so if you buy lunch / snacks at work that has to go down, if you go out with your friends then that has to go down; all the yearly and one off spends have to be divided by 12 and go down too...because you're going to save up the money for them so when they become due they don't just go on the CC...so car tax, insurance, MOT, RAC/AA, servicing ..do you buy present/xmas expense, holidays, boytoys ? All these have to go in the SoA otherwise you have a totally false sense of you financial position.
so at the moment your income is 1004 your spending is apparently 185 so according to these figures you have about £814 per month to throw at the debts....but presumably that isn't right is it?
so rethink the SoA and repost so we can see where the money is going and what is available to repay the debts.

Annie_Fanny

£814 - wow you can throw that at your debts each month?! If that truly is the case then you will be debt free in approximately 2 years - much quicker then if you get a consolidation loan for 5 years......