Guidance required from the regulars please

beach_3

Hi,

Can someone offer me some advise. In the past few years since I have struggled with my debts. I have due to promotions at work and being much more careful about paying on time managed to improve my credit rating in the past couple of years. However I have done the consolidating loan thing and have several loans and still have credit card bills. Rather than start to save anything it has been suggested that I try to pay off my debts in the most economical way. I did use the snowball technique and have been chipping away at my credit cards swapping to interest free cards and have reduced the amount on those. Although I know I could do better at this.

It has been suggested to me that I change my current loan to a better interest one. Can someone please advise based on my curent situation.

I currently pay 236 per month for a loan with the Halifax which was taken out in 2004 over 7 years. 7.9% per annum, this includes payment protection which they won't let me stop.

I then pay 109 for a loan with M&S taken out in 2003 over 5 years, 7.3% per annum. Stopped pp

I also have a cahoot loan for 10,000 which I took out in 2006 paying 208 per month for 5 years, 9.7% , no pp.

I have now about 8,000 on credit cards which I have reduced from 11,000 since March.

The question I would like answered is that if I were to find someone who would lend me money at a lower interest rate would it not be a false economy as I would have to get a loan for the settlement figure from my current lender. Also in March of this year the best interest rate I could get was 9.6%.

Also is there anything else anyone could suggest that I could do to try and pay thing off in the best way.

Thanks

Beach

Emmzi

Beach,

in pure maths terms, the first step here is to get accurate quotes for early settlement - god only knows what will be added on! so get all the information first.

Then get quotes for alternatives based on total amount of settlement figures.

Compare the alternative with the total amount you would have been paying i.e. monthly installment x number of months to run. That will tell you if you will really save anything.

As you know, the DFW nerds do like and SOA so they can see if there's any money you could save anywhere else.. if you would like opinions on your cutbacks and if any more can be cut, please post!

beach_3

OK this is embarrassing here goes;

Salary 2,600

Outgoings

Rent 1000 inclusive of bills
Loans 236, 109, 208
Pet plan 27
Tmobile 15
Pru life insurance, gym 60
insurance 10
food 300, I buy food partner pays car and other bills
travel 80
tv lisence 10

credit card payments variable 200-400

Emmzi

Beach,

wasn't so bad, was it? You're lucky you get a decent wage

Looks like you have £145 a month spare, unless there is a figure missing for Pru (why is it in with gym?) Where does this usually get spent?

Can you break down the bills in rent- it seems very, very high!

What is 'travel' if you have a car?
What is the other insurance (£10) for?

moozie_2

Welcome and well done for posting your SOA!

beach wrote:

OK this is embarrassing here goes;

Salary 2,600

Outgoings

Rent 1000 inclusive of bills Can you provide a break down of this? Seems very high.
Loans 236, 109, 208
Pet plan 27
Tmobile 15
Pru life insurance, gym 60 Why together???insurance 10 What is this for?
food 300, I buy food partner pays car and other bills Food for how many? What other bills? You pay £1,000 for rent and bill
travel 80
tv lisence 10 Why isn't this with bills?

credit card payments variable 200-400

lil'H

Hey and welcome,

You certainly are earning enough to tackle your debt situation. Firstly be as thorough as you can with your outgoings, what about presents, car costs/public transport costs, haircuts, clothes etc etc etc.

I'd also say if you are serious about shifting your debts then the gym has to go, go running instead, that would save you £720 a year! Grocery bills as well can be cut considerably.

Also why not list your debts on a signiture (will show up at the bottom of each post you write, see mine under here) this is great to keep track. I have days when I'm really fed up and think i'm not shifting the debts, update my signiture figure and it gives you a real boost to be able to keep track. Good luck, be totally honest with yourself and your sending, set a target date to clear your debts and keep popping on here, you'll become obsessed with money saving in no time!


Lil'H

beach_3

I will have a go doing the signature. In answer to question earlier my gym and pru health medical insurance is combined part of an offer I took up 6 months ago, the first 6 months of the gym was free, I desparately want to keep this going as going to the gym stops me spending and going out after work to over priced bars which helped me get into this mess in the first place. 1000 a month is not expensive in the area I live not when the cost includes electric, phone and community charge house insurance etc. I live in Westminster London with my OH. I managed to get the confidence to tell him about the extent of my debts 6 months ago he also has some debts but has them under control. I do not have a car and travel is bus and tube to work.

I will do the signature thing so I can see how things are coming down.

Thanks for replying

Cara79

Hi there :hello:

Can I ask why you pay the £1,000 rent (which includes all bills) and £300 for food. Shouldn't this be split with your other half?

What bills does your OH pay if all bills are included in the rent?

Sounds like you may not be getting a fair deal?

I can understand about the gym, but £60 per month is extortionate! I pay £36 per month.

Good luck with tackling the debt.

Cara

CLAPTON

from the way the SoA is written and your split with OH its impossible to see if there are things missing

but

your income is 2,600
spend (before debt ) 1,502

surplus for debt repayments is 1,098

loans repayments total to 553

leaving 545 for the CCs....is this what you find? If not it might be worth starting a spending diary and really find out where your money goes (maybe things like going out, clothes, work lunches/coffees , holidays whatever)

Also there is lots of scope to reduce your shopping spending...presumably just for two people you should be able to reduce this by about 100 by planning meals in advance and only buying from your shopping list and no implulse buys.

If the best loan rate you can get is 9.6% then there is no point is trying to do anything about the loans anyway.


Have you tried to get low Life of Balance CC so you could BT ?

beach_3

Thanks again for replies the 1000 is half of the total outgoings on our home minus food I am ashamed to say he also buys household food and stuff as he does the monthly internet shop which is about 150. I think a diary for the month is a good idea. I'm going to eat out of the cupboards stop going to M&S and go to our local lidl, he tells me to stop spending so much on food. I feel very ashamed because I can see I earn a good wage but I am just squandering it.
The gym is 25 per month but it was part of the offer with pruhealth. I was paying 75 per month at the same gym so cancelled and now get health insurance and gym for the 60 as insurance is 35. I have already got one interest free card with the maximum I could transfer on it. My bank the halifax have just let me upgrade from a solo card to a fully fledged debit card as I have been trying to keep my account in order. They also offered me a credit card with 6 months interest free which I have now got.

gallygirl

Beach, well done on posting your SOA and asking for help. For what it's worth......
I currently pay 236 per month for a loan with the Halifax which was taken out in 2004 over 7 years. 7.9% per annum, this includes payment protection which they won't let me stop.

I then pay 109 for a loan with M&S taken out in 2003 over 5 years, 7.3% per annum. Stopped pp

I also have a cahoot loan for 10,000 which I took out in 2006 paying 208 per month for 5 years, 9.7% , no pp.

I have now about 8,000 on credit cards which I have reduced from 11,000 since March.
You appear to be accumulating debt at a very fast rate - loans in 2003, 2004 & 2006, plus what was another 11k in debts. I think you need to do more than keep a spending diary for a month. You need to stand back and take a long hard look at yourself and why you got into so much debt. Until you face up to this, and take steps to stop it happening again, all you will be doing is papering over the cracks.
On a more practical level -
What have you done with all your credit cards? You need to cut them up NOW. Then, once a card is paid off, phone up the company and insist you want to close the account - do not be swayed by their spiel, they will try to persuade you to keep it.
What did you spend the money on? i.e. what have you got that you can sell? Get on ebay, amazon etc and get rid of all that 'stuff'. Chuck all spare at teh credit cards, tehn start on loans. If they're not flexible save the money then settle when you've saved the balance.
Look on moneysaving old style for recipes, challenges etc.
Can you breakdown the 1000 into individual amounts - e.g. how much is gas/electricity etc. Are you getting the cheapest possible? Before switching check out quidco for cash back - use this site whenever possible.

But most of all, you MUST address why this has happened - presumably each time you got a loan it was never going to happen again? What's different this time?

Sorry to be so negative, on the bright side you have a good salary so can make big inroads.