My Situation - My Debt Free Plan ?

Granitewood

Hi,

First time posting on here so hopefully I'm ok asking for a bit advice.

A brief overview of my current financial situation:

Personal Loans - £8k - 12%APR 6 years 3 years remaining
Credit Card £3k - 19% APR -Never gets pied off
Car Finance - £4.5k -8% APR - 3 Years with 2 years remaining


I have a modest income and the above is costing just over £600 per month of which I could do with out also given that i have best part of 3 years to get this off my back.

one thought, to get this cleared within 12-18 months without paying any interest. ( or very little)

Car Finance - Im in positive equity, get rid of the car and drive a banger for a while.

Cards and Loans - Try and get the rest onto 0% credit cards (over 12-15 months) leaving me with about 2k at the end of 15 months. Either transfer to another 0% card and pay off with in 3-4 months or convert to personal loan, worst case bare the 19% interest for 4-5 months. ( I appreciate there may be a 3% transfer fee so i will have to grin and bare the £300 odd fee) I can then pay £600-£700 per month of the balance hopefully knocking it off in half the time.

As you can see this is largely dependant
A: gaining 11k Credit on a card
B: being able to transfer my personal loan to this card.

If anyone has Any advice or experience on this, whether this is feasible or not or if anyone has done something like this before i would be extremely grateful to learn your thoughts.

I know this all is my fault and hindsight is a wonderful thing and I have certainly learnt my lesson!

Thanks for taking the time to read this and I would be very grateful for any feedback you may have.

Many thanks

GW

Tixy

Hi and welcome


B first - as its probably quickest to answer - To be able to transfer the loan to a card it would need to be a super balance transfer card, these allow you to put the money into your currnt account from where you can pay off the debt - these are the only cards that allow this http://www.stoozing.com/sbt.php

A is more difficult - From what you have said about your modest income I would imagine a new card with an 11k limit is going to be tough.

How much do you earn currently? You already have at least £11k credit unsecured credit (plus any overdraft limit you have or any other credit accounts/catalogues etc) plus the car finance.

People are struggling at the moment to get good credit that takes them much over 50% credit to income ratio, sounds like you might already be close to this, so another £11k on top is just not feasible (I know you want to consolidate but a new lender has to assume that you might spend all the new card and looks at whether you can afford your existing debts and the new card you get, sounds like the answer might be no:().

What is your credit history like by the way? any missed payments/defaults? Do you have an overdraft? do you use it every month? ever go over the limit at all?

That said there might still be other alternatives for you that would mean you could clear the debts quicker. Perhaps start by looking at just shifting some of the debt to interest free or a low life of balance. You'd be more likely to get one you could move just the £3k card to.

Have you checked the terms of your finance agreement with regards to you being able to sell the car and then pay the debt off? (was it secured finance or just a personal loan you took out for the car?)

Granitewood

Hi Tixy

Many thanks for you quick and helpful reply and your warm welcome.

I'm going to have a good look at the Super Balance Transfers, I shall let you know my thoughts.

Just to answer your questions, I Currently take home £1400 a month, my credit rating should be good, I've held credit for sometime now, successfully paid of previous loans, have always had an income (that has only grown and never declined) and never ever missed a payment. Admittedly i didn't include my over draft which is £1500, I regularly go into this, but it is always goes positive once im paid (for a few days anyway)

Ive had a settlement figure on the car of £4.5, and it wont be a problem to sell the car for at least this the £4.5k include a £350 final payment fee too. but it was secured on the car.

Thank you again for your help and response, if the above is any use I would love to hear your thoughts.

Thank you.

GW

Tixy

Not sure if this might help you but have you looked at a debt snowball calculator ever? With this you input your debts and the aprs etc and how much you can pay off each month. Then it prepares a calc to see how long it will take you to pay it all off and how much interest you will pay.

They can be really useful, you could start by doing one with your debts as they are at the moment and then when you start to look at new cards etc you can compare how much difference any product would make to your debt free date. www.whatsthecost.com has the easiest one to use (and you can save your figs etc for another time).

You may already know this but just in case - when you are applying for new credit, each application 'dents' your credit report a little. People are generally advised not to have more than 3 applications in a 6month period, so don't apply to all over to start, and if you do get knocked back don't keep trying everywhere until you have worked out why you were knocked back.
If you get offered a card with a lower limit that you wanted, don't immediately phone up and close it, see if you can work it in to your snowball to your advantage.

It might be that you would have more success with cards after the car loan is cleared (and leaving it a month-6weeks to ensure your credit reports have been updated).

What card is you current card? If you moved that debt to a new card then sometimes the exisiting card will give you a repeat customer offer after a month or 2 with nothing on the card. So can be worth hanging on to it for a couple of months to see what deals they might offer.

Hope some of these tips help a bit.

Granitewood

Tixy You're a Star,

thanks for that calc, i think that's a very useful tool. I was conscious of not making to many applications at once. My current card is a HSBC (tell you what we'll put your credit limited up by a grand just before Xmas, just in case your tempted to spend it all ) credit card that's the only one I have. I can see what your saying about a potential creditor having to evaluate the situation that i will spend what they lend rather than consolidate. Am i right i thinking that the ceiling on a unsecured credit is about £25k ?My thoughts are if that i move the debt over in 2 or 3 lumps for example: taking into consideration what you have said, asking for another 11k when i already have 11k (lets presume the cars now gone) might be a big ask, however if i take say 5K in 2 monthly -quarterly blocks would this be more feasible ?

Ok it may not fit in with my 12 month ambition, but its on the way. With that in mind before i say anymore i will check out the snowball calculator and check that im not getting into deeper water.

Thank you again

All the best

GW