Unsecured loan to pay CC debt??

bikerman_2

I have been lurking on the board for a while and the advice of the members has helped and inspired me tremendously.Now I'd like to ask my own question and see what advice comes back. I have approx £6600 of CC debt split as follows

£1974 Halifax 0% til Sept 06 then around 15%
£399 NatWest 0% til Nov 06 then 15.9%
£4235 Tesco 0% til next Jan then somewhere around 15% ( rate may change )

The repayments of £185 a month are making things very tight and I know that as the minimum goes down I'll be sorely tempted to pay less thus stringing the debt out. Question is should I take out an unsecured Northern Rock loan of £6600 @ 5.7% over 5 years with no payment protection and repayments of £126 per month? The extra £59 a month would be very useful.

Full SAO as follows:

OUTGOINGS

TV Licence 10.49
Council tax 77.10
Water 11.08 ( metered )
Mortgage 774.77 changed July 05 5 year fixed rate £3k penalty for changing ( house worth £115k equity about £5k )
Internet & phone 41.00 Work repays £18 Bband cost so 23 nett
Gas service 13.58 British Gas service care policy boiler 18 years old
Maintainance 320.00 No leeway!!
Electricity & Gas 27.50 With Scottish Power
O2 15.00 11month contract left 200 free mins 300 free texts
C Card min payments 185
Food, clothes, 240 ( me and 2 kids 3 times a week )


Luckily no petrol or car fees as work pays these

INCOME

Salary varies as its commision only but average over past 12 months is £1635

No other income,nothing left to sell on E-Bay!!

Summary Income £1605 outgoings 1692 deficit £87

I had £2k in savings but this is now £800 as it paid this years house and contents insurance plus birthdays for the children. I'm dipping into the remaining £800 by £100 a month to make ends meet but won't last past Xmas.

So is the loan a good thing and any other advice please?

loobyloo1980

Try entering your card balances, minimum payments and APR's on this snowball site https://www.whatsthecost.com and see if it can save you money. Please if you can do not take out a loan to pay them off - ot only leads to more debt in the long run. I see you have some 0% interest rates on some cards - are the cards full to balance? If not, balance transfer a bit from the card that ends 0% in september as that will save you some interest too. Everything else looks ok. With the food and clothes, could you break that down a bit into what you spend on what bits? It's easier to see if you are overspending like that.

I would also use you savings to pay off your debt and then start saving again later when you can afford to.

vivaladiva

Hi
The 0%'s seem like a good deal and if we can save you some money elsewhere you might eventually be able to overpay a bit.
Can you downgrade your O2 contract? I'd take a look at food and clothing.
Try black-saturn's menu planner over on Old Style.

justruth

It appears that your problem is not the debt, as much as your defecit at the end of each month. So I do understand the temptation to get a loan to try and reduce your monthly outgoings, however I believe that you would regret it if you did. Do you have anything you could sell on ebay? Is there a possibility of using the £800 saving to pay off the Natwest CC when the 0% ends and BT the others to other 0% cards, if so what impact will this have on your monthly outgoings?

Is there any other way to increase you income? (There are two figures up there, one higher than the other but both show you spending more than you earn) I understand that you are commision only, but is there anything you can do part time to supplement your income, a hobby that pays etc?

Best wishes either way