Loans and shared current accounts

houndour

Hi,

My boyfriend and I are moving into a house very soon (renting from family).

I've always been really good with money and my only debt is a student loan of which I'm paying back way more each month than I need to. So all this is very new to me.

I knew my bf had loans, but the extent of it only came to light in January. He has £5500 on credit cards. And prob about £20k from 2 loans.

I've really bugged him about the loans, but he can't find the paper work. I want to know exactly how much he has, how much he's paying back and how much interest etc...Surely he can just phone these companies and they will re-send the info? Or will this cost money?

I've helped him sort out the credit card problem. He's cut up his one credit card and has been accepted for a barclaycard, which I have. And he has transferred £3500 onto that 0% interest till jan i think. He's applying for a virgin card, but we haven't heard back yet.

He's paying about £150 a month for each loan. I've been trying to avoid any consolidating or getting a big loan to pay off the 2 loans...but his outgoings are still too high.

Is it wise to keep the loans as they are? If he's telling me the truth then one of the loans is only £2000. So surely if he could it would be best to ask his dad for help on this smaller loan and pay his dad off over time? And then that'll leave him with 1 loan of £150 a month repayments?

If his dad cant help, should he get 1 bigger loan?

My final question...it may be a bit silly but I want to make sure. We are planning to open a joint bank account for rent and bills (it's also my way to make sure he deposits a fixed amount of money every month right after he gets paid, so he doesn't spend the rent!!). If we open a joint account, would this make me in anyway resposible for his loans if he couldn't pay them?

Thanks.

Fatboy_NSS

It may well be worth consolidating the loans. Loan interest rates are really low at the moment with many banks at 6.5% and some even lower, so this could be a large potential saving. Of course you'd need to find out the current interest rates first, or at least bug him to look into it.

grumbler

houndour wrote:

My final question...it may be a bit silly but I want to make sure. We are planning to open a joint bank account for rent and bills (it's also my way to make sure he deposits a fixed amount of money every month right after he gets paid, so he doesn't spend the rent!!). If we open a joint account, would this make me in anyway resposible for his loans if he couldn't pay them?

Joint account does not make you responsible for your bf’s debts. However, be careful with it. It could generate a ‘link’ (am not sure this is a right term) to your bf in your credit files. It looks like your bf still has a decent credit history as he managed to get another credit card. However, if he has problems with paying debts in future (£20K is quite a big amount, this scenario looks quite probable for me - based on your description), this link can impair your credit history. Possibly, standing order on his current account transferring money to your account could solve problem with paying rent, bills and other expenses in case he has regular income.
I appreciate your will to help him in sorting out his finances, but it looks like he does not! Be careful with such a friend in everything related to money!

Debt_Free_Chick

Grumbler is correct

If you open a joint account with an overdraft facility, then you will be "financially linked". So if your boyf later has a bad credit record, this would be reflected in your credit record too. Agre with Grumbler's suggestion ... he pays you for his share of bills and you pay them from your account.

HTH

houndour

Thanks guys. I've been thinking about this a lot and I was thinking of asking him if he would pay me a lump sum every month, and I would store it in my egg savings account, therefore if the rent doesn't get paid straight away at least its earning some decent interest. I will speak with him tonight about it.

We talked again last night and he's agreed to dig up all his statements so I can see where his money is going. And he's going to call the loans company to find out what all the interest is etc. So thats a step in the right direction.

Thanks.

DiggingOut

OK, fools rush in where angels fear to tread, so here goes....

Why are you moving in with a guy who hasn't told you about his finances and still hasn't given you the whole picture?

Why share anything financially with him?

Look, if he just told you about the loans in January, then he wasn't straight with you before, right? And how do you know he is being straight now? Aren't relationships supposed to be built on that five-letter word, trust?

Why does he have to be pushed to come clear on all this? Is he not honest, or completely irresponsible, or just a terrible communicator, or some combination of the three? In either case, what is life going to be like with someone like that?

I'm sure he's a great guy in a lot of other ways or you wouldn't bother, but it seems to me that he needs to grow up and take some responsibility, and be completely clear about the entire situation with you, before you rush into anything.

Obviously I don't know you, him, or the situation at all, but I hope you'll stop and think, at least.

Maybe I'm just too old....

rchddap1

I've been living with my boyfriend for over 5 years. We still have seperate bank accounts. It means that we can't spend each other's cash and land them into trouble. However, we do seperate the bills. I pay certain things, and he pays for others. At the end of the day we both pay for the upkeep of the house (bills, food etc...), and have some money left over to spend elsewhere.

I would seriously think whether you want your boyfriend to be able to spend you money, as that is what might happen. My mother has the right idea. She has her own account, and access to my dad's. So she can spend both her money and his.

Sit down with your boyfriend and work out where his money is going and how much he can afford to pay for the upkeep of the house, food etc... Work out a budget for him. And then set up some direct debits either to your account, to a 'household' account or direct to the electricity company etc...

You can ask for money all you like, but if he hasn't go it to give, then you need to sit down and work out what is possible. If his outgoings are already too high can he really afford to take on renting a house? I'm sure that you will come to some arrangement with him, but just be careful that you don't let his finances & yours become intermingled.

My partner's credit history isn't exactly rosy, but its not the worst in the world. By keeping our finances seperate I have been able to get a mortgage for a shared ownership house (we own 40% and rent the rest from a housing association). I shudder to think what would happen if we'd have tried to get a mortgage together. Its always best to safe than sorry.

houndour

Hmmm, I think thats a bit harsh. He just has different priorities to me. He's been living with his parents and I've been renting for 7 years now. I'm a lot more independent than him and have had to learn quick to deal with money and budgeting. Whereas his parents keep giving him money...so his been led into some false security that nothing could go wrong financially.

I've spoken to him and he's agreed to pay a standing order directly into my account. I told him I didn't want to share his credit history (which incidently isn't that bad). He was totally fine with it. I have applied for the A&L account that has been recommended on the site...£20 for free, and 5% interest till dec not bad. I am going to keep this account just for shared costs/bills and we;ll put the same in every month.

I don't want to sound like the naive girl getting herself into trouble with someone who can't deal with money, but he is trying hard. He's done the 0% balance transfers, we've found some stuff that he pays monthly that he can cancel (e.g. insurances that are covered by house insurance). He's cut up his credit card. He's been paying off more than the minimum on his card while he can afford to.

He's gets overtime and is working every other Sunday to get the extra cash for 'fun' things like dvds.

I trust him, but I don't trust him not to spend...come on most people tell white lies about spending...my parents have never been in debt or got anything on HP and are model citizens of handling their money well...but how many times have I heard my mum tell dad that the jacket she bought cost £50???!!! When infact I know it cost £100.

If he was unwilling to help himself or show me his statements and let me control the house finances, then yes I'd be more concerned. But Im not going to give up on the man I intend to marry because he can't resist a DVD.

And he told me about his loans from the start, just not what they were. And that early in the relationship, I don't think it was any of my business. We've only been going out for 18 months.

Digging out...
I hope that didn't sound like a rant. It wasn't meant to be. Maybe I made him sound more irresponsible than he really is. I understand where you are coming from. I'm certaininly not ready to buy a house with him yet, but I think moving out from his parents will help him a lot and he will finally realise the value of money and hopefully understand why I get upset with him buying CDs from HMV instead of play.com!

Thanks for all your advice guys...

DiggingOut

houndour wrote:

Digging out...
I hope that didn't sound like a rant. It wasn't meant to be.

I DID say I was being a fool rushing in....

Your original post did sound like he might not being straight with you. Sounds like you are pretty sure he is.

I'll stick my nose into your business one more time, though. Don't lie about the cost of coats. Little white lies can do a lot of damage, too -- the little white lies, when found out, can make someone wonder if there are big ones. Not worth it.

Hope you'll be as happy as my wife and I are....

houndour

You're so right about white lies...not worth the trouble.

Hope you'll be as happy as my wife and I are....

awww thanks

johannamse

Hey Hounder,

My boyf was USELESS with money (debts all over the place - but not bad credit history) when we first moved in together, and I did what you will do. (ac in my name with his money going in). Well it took about 8 months of "discussions" for him to get it, and to start being really careful. I really helped him, but now he is really grateful. He has now said (dont tell him I told you), that he never realized that he could do it, and what a joy it is to know where all your money is going and what to do in a finance emergency. He actually never thought he would be able to do it. So, my advice, be patient, but be firm, if this is the guy you want to marry then tell him you are going to be organized with money and money will not hold you back as a couple and not split you up( as it does so many). Since my boyfriend has sorted/sorting his finances out he is a changed man. Hey, we all cant be good at everything - I do all the finances now - why don't you - free him up to do the things that he is good at? - buying cds online ! (hopefully). Good Luck.