Going to make a positive start to reducing my debt.

samuel.s

I was due to finish my employment 20th December but have decided to take up employers offer of another 3 months work even though this means being out of the UK until March.
Anyway thought i would start to make some positive steps to try and reduce my debts even though the likelyhood of keeping to the plan after March is going to be unlikely. If i start to put things in place now i think it will prepare me mentally,especially in my search for work!
What i would like to know is i currently have a offset tracker mortgage (.49 above base) but it had a clause in the terms not to fall below 3%. The original loan was for £135,000 (£80,000 repayment and £55,000 interest only)
Outstanding balance is around £120,000 with 12 years to run on the loan.
Monthly repayments are just short of £700 per month.
At the moment i am not having my salary paid into my tracker account as there is no surplus left each month i did not see the point.
What i would like to know is the following
1) should i have my salary paid into my tracker account
2) should i switch the monthly payments to interest only to help clear my other debts,while the interest rate is fairly low at the moment?

listed below is a list of all debts and the outstanding amounts plus interest rates charged.

1) Santander loan os = £6,468.29 apr=16.6100% monthly pay £335

2)Egg credit card os= £9132.65 apr =21.9% monthly £250 (min Payment)

3)HSBC credit card os= £6,930.20 apr=21.9% monthly £180 (min payment)

4) Virgin credit card os £11,045.57 Monthly interest rate = 2.2071% monthly £250 (min payment)

I did just get declined for a barclaycard on a low rate for the term, the reason they gave was i already had too much credit.

The three credit cards are pretty much up to their limits and i am only making the minimum payments per month.
The Santander loan is the one i was thinking of tackling first as i calculated if i can remain in employment i could have it paid of in a year if i switched my mortgage as previously mentioned.

Any help would be much appreciated.

Samuel

samuel.s

Anyone offer any kind of advice or recommendations?

SuziQ1962

Hi i am not an expert on this ,but didn't want you to feel no-one is interested,I would post an SOA with all your monthly incomings/outgoings on so that the experts on here have something to go at.There is a link on the DFW page and it's easy to do plus it saves so you can amend it if your circumstances change. Good luck ,hope you get some good advice!

samuel.s

Please find listed below my SOA. Hope this helps with any recommendations i receive.
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 2536
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 935
Total monthly income.................... 3471
Monthly Expense Details
Mortgage................................ 693.5
Secured/HP loan repayments.............. 228.60
Rent.................................... 382
Management charge (leasehold property).. 100
Council tax............................. 0
Electricity............................. 80
Gas..................................... 20
Oil..................................... 75
Water rates............................. 45.22
Telephone (land line)................... 50
Mobile phone............................ 10
TV Licence.............................. 12.37
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 40
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 8.33
Car Insurance........................... 18
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 40
Contents insurance...................... 0
Life assurance ......................... 26.23
Other insurance......................... 72.86
Presents (birthday, christmas etc)...... 30
Haircuts................................ 3
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1945.11

Assets
Cash.................................... 0
House value (Gross)..................... 420000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 420000

Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 125000...(693.5)....3.0
BTL Mortgage...................187000...(228.6)....1.49
Total secured & HP debts...... 312000....-.........-
Unsecured Debts
Description....................Debt......Monthly.. .APR
Santander......................6000......335...... .16.69
Egg............................9162......249.4.... .21.9
MBNA...........................11047.....235.3.... .25.0
Ford Credit....................3000......186.......0
Liquidators....................5500......150...... .0
Metropolitan col...............6000......150.......0
HSBC...........................6992......171.6.... .21.9
Total unsecured debts..........47701.....1477.3....-

Monthly Budget Summary
Total monthly income.................... 3,471
Expenses (including HP & secured debts). 1,945.11
Available for debt repayments........... 1,525.89
Monthly UNsecured debt repayments....... 1,477.3
Amount left after debt repayments....... 48.59
Personal Balance Sheet Summary
Total assets (things you own)........... 420,000
Total HP & Secured debt................. -312,000
Total Unsecured debt.................... -47,701
Net Assets.............................. 60,299

samuel.s

Three phonecalls this morning and have already saved nearly £270 per year.

Cancelled my aa membership this morning £153 saving.I have lived outside the uk for the last 3 years yet unknowingly have been paying for family membership to the AA via a direct payment on my credit card. Had to call the AA to actually cancel it so no more payments to them in June.

Again cancelled subscription to credit expert saving £6.99 per month

And finally Cardguard saving £29 per month. I had free cover from one of my card providers!

So quite pleased with myself so far.

Going to the bank this afternoon to see if i can get some of my charges returned.

SniperMonkey

Congrats on the positive start.

Emily87

Phone hsbc and ask them if they can reprice the excisting balance on your credit card. This can be done and does work if you get to speak to the right person.

Lemon_Tree

well done for making such good starts.
As to tackling your loan first, i have a couple of thoughts (feel free to ignore them)
1. It's not you highest interest rate so you may save more by tackling one of the credit cards first.
2. Often loans don't let you over pay them, you have to save up and pay them in a lump sum (you'd have to check this out with Santander)
3. Often loans have all the interest front loaded onto them, therefore you don't save as much by paying back early as you still pay a lot of the interest.
Just my general thoughts.

Is your SOA after the payments you've saved? if not then it may pay to rework it, also if you truly have an excess each month and you're not actually seeing it then you will probably need to start a spending diary to actually track what you do spend, It's scary what we forget we've opened our purses/wallets for.
Good luck on your journey, even if you know you've only a guarenteed income for 3 months at least you can make a good start and start learning good habits.

samuel.s

Emily87 wrote: »

Phone hsbc and ask them if they can reprice the excisting balance on your credit card. This can be done and does work if you get to speak to the right person.

Hi

What does this mean when you ask them to reprice the balance. Are you talking about asking them to reduce the APR or actually give me a discount on what i owe them.

samuel.s

Lemon_Tree wrote: »

well done for making such good starts.
As to tackling your loan first, i have a couple of thoughts (feel free to ignore them)
1. It's not you highest interest rate so you may save more by tackling one of the credit cards first.
2. Often loans don't let you over pay them, you have to save up and pay them in a lump sum (you'd have to check this out with Santander)
3. Often loans have all the interest front loaded onto them, therefore you don't save as much by paying back early as you still pay a lot of the interest.
Just my general thoughts.

Is your SOA after the payments you've saved? if not then it may pay to rework it, also if you truly have an excess each month and you're not actually seeing it then you will probably need to start a spending diary to actually track what you do spend, It's scary what we forget we've opened our purses/wallets for.
Good luck on your journey, even if you know you've only a guarenteed income for 3 months at least you can make a good start and start learning good habits.

I understand what you mean reagrding the loan with santander,it did start off as a Cahoot loan which you could draw on as and when required. You had a minimum payment to make like a credt card and i have been overpaying this by approx £100 per month.
I wanted to tackle this one first as it has the shortest time to run (23 months at existing £335 per month).This would then give me a big spare chunk of capital left each month to tackle the other debts and would be nice to a least see one debt disappear.

I put the Virgin card in the snowball calculator and if i continue to pay the minimum per month then it will be clear in 114 years!
Virgin seem to make it very difficult to make overpayments, i went on their website to see if i could change the monthly amount i pay them and you had to download a new direct debit. When i did this you have a choice of two boxes to tick 1) either pay the minimum per month, or, 2) clear the whole balance
Looks like it does not allow you to set repayments at a set level like Egg and HSBC have.

Will look at the SOA again later today and update if necessary.

Been to poundland this morning and purchased a nice day per page diary for only a £1 ( i suppose the clue is in the name)

Been to HSBC this morning as well to see if they can quash or reduce charges on a dormant dollar account i had. It had not been used since april 2001 and they have put over 1000 in charges to the account. I need to wait 48 hours for decision. They had been send ing statements etc to wrong address so just hoping they see sense on this one.

Emily87

samuel.s wrote: »

Hi

What does this mean when you ask them to reprice the balance. Are you talking about asking them to reduce the APR or actually give me a discount on what i owe them.

They reduce the apr on the balance you currently owe them, but any further spending goes on at your normal balance. If you threaten to close the card they sometimes pass you through to the retentions department that can offer you this. Worth a try anyway!