heres my situation - would it be wise to take a loan?

jamesy1986

I'm currently have two credit cards and an overdraft. The overdraft isnt a priority I've made a deal with the bank to reduce it gradually by £40 a month. I've about £3500 in credit cards I need to pay off.

I've worked out how much I'm spending a month compared to my income.

My monthly income is at the minute between £700 and £950 a month depending on what hours I do.

My outgoings are as follows per month:
rent £200
gas £10
electricity £10
other house stuff £10
cc1 £60
cc2 £50
overdraft £15 - reducing by £40 every month
shopping £80
travel expenses £10
internet £15
mobile phone contract £25/
other £150 - being cut down to £100
total = 635, cutting it very close.

I've cut down on socialising i.e drinking and I'm a smoker, I've cut down on drinking big time and limit myself to £30 on a night out, I use to easily !!!! away £60, and I'm not going out as much. I've cut down on smoking for many reasons and have switched to roll ups which save me a lot of money. I've also cut down on shopping, my electricity and gas bills are split with 3 other people and my internet bill is shared with another person but I pay the bill.

Hope thats enough information on my outgoings.

Either way my priority is to reduce these credit card bills, they're sapping so much money from me a month and it barely makes a dent in them. I'm thinking about taking out a loan for £4000 over 3 or 4 years, it would reduce the credit card headache and I'd be paying a fixed rate every month which is fine by me, I'd know what exactly to budget for.

Would this be a good idea? or would anyone have any other suggestions for me? I'd also like to finish my driving lessons with any extra money left over from the loan which I can't afford to do now, meaning I get a better job with more pay.

zppp

Here is how a lender would look at affordablity.

Income
£950.00

Expenditure
£200 Rent
£110 CC Repayments (although you may be using some of funds to pay off CCs, they have to calculate it in case you don't repay them)
£40 Overdraft arrangement
£150 other - is that a financial agrement or not?

---

£500 per month

A lender will then add on to the £500 an amount of about £400 to cover all of your other monthly expenses = c. £900. Whatever is then left is available for repayments. In your case that would be £50, assuming the £150 is finance and you are being paid at £950 per month.

So it entirely depends on what this £150 is and exactly how much you get paid exactly each month, not including overtime.

yorkshire-lad

I think the first thing you should ask yourself is where the credit card debt has come from.

Has it been built up by living out of your means,using them to pay for cigs and drink,socialising etc,if it's a yes then a loan wouldn't be a good idea.
You'd be freeing up credit on your cc's if you were to get accepted for a loan,and you may be tempted to start using the cards again.

I'd pop over to the debt free wannabe board and make some cut backs,sell things etc.

Robbing Peter to pay paul is not always the answer.

jamesy1986

Sorry I should have made clear, the "other £150" is not a financial agreement.

I have been going through the articles on the main site. I'm from Northern Ireland and have been looking at the Northern Bank balance transfer credit card (can't post like a new user apparently). 0% for 5 months, and no fees. Does that mean no monthly bills for a balance of £3500 for 5 months? 22.9% after, but by that time I'd have it paid or moved.

Within 5 months if I keep myself right I could pay off a good £2500 or more but at the minute I can't because of the monthly fees I'm getting from my two cards. Even without a loan, I'd love to be able to shift the credit to somewhere else and give myself some breathing space and a chance to pay them off and get rid of the stress too. Would that be a better idea? I'm not that big on the idea of a loan, it was a suggestion by someone else and so I've been doing a bit of research.

jamesy1986

yorkshire-lad wrote: »

I think the first thing you should ask yourself is where the credit card debt has come from.

Has it been built up by living out of your means,using them to pay for cigs and drink,socialising etc,if it's a yes then a loan wouldn't be a good idea.
You'd be freeing up credit on your cc's if you were to get accepted for a loan,and you may be tempted to start using the cards again.

I'd pop over to the debt free wannabe board and make some cut backs,sell things etc.

Robbing Peter to pay paul is not always the answer.

The cc debt mainly came from being a student over in England when I got let go from my part time job in a hotel because along with a load of other people, and then months of unemployment after graduating, expenses moving home, etc. I couldn't even get jobseekers for a few months because my course didnt officially end until pretty late even though I was finished and had moved home etc.

I've had a good look at that board and I'll make a few posts there see what I can do, but I need to get a better understanding on what to do right now as well. I'm closing the credit card accounts when they've got a 0 balance. I've paid off other debts (family mainly) recently so all thats left are the credit cards.