Light bulb moment - time for action

ManagingDebt

CH27 wrote: »

I've been with them for about 16yrs & they have been very helpful.
When I had debt problems a few years ago one of their staff talked to me on the phone for hours & was so supportive. She gave me the courage & advice to get myself sorted.

That's good to know. I've got Santander who are rubbish and HSBC who i quite like. Creating a new relationship with another bank for my current account maybe a good thing. The sooner i can close my Santander accounts the better - i just need to pay off £2550 in overdrafts first :rotfl:

ManagingDebt

I had another bill to pay so not as much as i first wanted, but i've just paid £525.22 off my Virgin Credit Card.

Pay day tomorrow so some more will be coming off once i've done the monthly account suffle.

Feeling quite pleased with myself.

Clarie_2

Looks like you are making a fantastic start on dealing with your debt, go you!

The only thing I'd say re loans and paying back parents is 1)parents generally give a better rate of interest 2) parents don't charge you if you want to pay it off early and 3) as you earn more/ spend less you can easily up the parental repayments whenever you want.

Would you be able to talk to them about the situation you're in? You might find that they applaud your plans to sort out your debt, and approve of your frugality in paying off the credit cards first. I'm sure they are far more interested in your ability to handle your debts/ repay money wisely etc etc than the £5000!

(plus, my cynical brain says, showing them you can regularly pay back a certain amount every month makes you a safer bet when it comes to asking for that all important deposit-for-mortgage help!)

Clarie

andymc29

Regarding paying back your parents. Unless they have problems and really need to be paid back quickly. You should lay out to them what your plans are to repay debts and pay them back when you can afford to. Right now the best option is to snowball your debt payments starting with the largest number. don't lumber yourself with more debt, just to make yourself feel better for paying your parents back quicker, they'll respect you more if you tackle things logically without trying to save face all the time (believe me, I've been there).

When I met my girlfriend nearly two years ago, I had over 27k in debt, since then I cut it down to under 15k and am hopfully going to be debt free by the middle of summer. I'm made plenty of sacrifices, but they've all been worth it (I even moved back home).

ManagingDebt

Clarie wrote: »

Looks like you are making a fantastic start on dealing with your debt, go you!

The only thing I'd say re loans and paying back parents is 1)parents generally give a better rate of interest 2) parents don't charge you if you want to pay it off early and 3) as you earn more/ spend less you can easily up the parental repayments whenever you want.

Would you be able to talk to them about the situation you're in? You might find that they applaud your plans to sort out your debt, and approve of your frugality in paying off the credit cards first. I'm sure they are far more interested in your ability to handle your debts/ repay money wisely etc etc than the £5000!

(plus, my cynical brain says, showing them you can regularly pay back a certain amount every month makes you a safer bet when it comes to asking for that all important deposit-for-mortgage help!)

Clarie

Clarie - thanks for responding. Your right about my Parents. I have just spoken to them and the £100 i have been paying them for now is enough for at least 6 to 9 months which is a great weight off my mind.

Looking at the numbers and timeline of your debt figures in your signature you've made amazing progress - how have you done this so quickly?

andymc29 wrote: »

Regarding paying back your parents. Unless they have problems and really need to be paid back quickly. You should lay out to them what your plans are to repay debts and pay them back when you can afford to. Right now the best option is to snowball your debt payments starting with the largest number. don't lumber yourself with more debt, just to make yourself feel better for paying your parents back quicker, they'll respect you more if you tackle things logically without trying to save face all the time (believe me, I've been there).

When I met my girlfriend nearly two years ago, I had over 27k in debt, since then I cut it down to under 15k and am hopfully going to be debt free by the middle of summer. I'm made plenty of sacrifices, but they've all been worth it (I even moved back home).

Thanks andymc29 - as i mentioned to clarie above, my parents have been great as usual and were fine with £100 a month for the foreseable future.

15k to be repaid by the summer - that is amazing. How will you do that? any tips?

ManagingDebt

I spoke with Santander and HSBC about the two loans i have and the HSBC balance transfer credit card.

The bad news: L1&L2 totalling £8k are fixed and i cannot make any overpayments. Which is a pain.:(

The good news: my HSBC balance transfer of £4k is up at the end of July. However they mentioned that i could get a loan out over 12 months or more and crucially make as many overpayments to the loan as i like. This is very good for me.

I was thinking that i could bring all remaining santander loans together and any remaining balance on the HSBC Credit Card and pull it into one place and bombard it with overpayments.

My plan to pay off now is:

• Virgin Credit Card - £2k
• HSBC Credit Card - £4k - pay as much as i can between now and the end of July.
• Pull the santader loans into one loan which i can overpay as much as possible.

I'm confident that i can pay off the virgin card and pay £2,500-£3k off the HSBC card before the end of July.

Having checked my experian report, i do need to have a few months of not applying for loans and paying off things to improve my credit rating before i apply for the HSBC loan in the summer.

I'd be interested to hear anyone's thoughts to this plan.

CH27

You need to check what interest rates you will be paying on both the loan & the credit card to see if it is worth your while.

ManagingDebt

CH27 wrote: »

You need to check what interest rates you will be paying on both the loan & the credit card to see if it is worth your while.

My current rates for the loans are:

5k 14.5%
3k 5.6%
Credit card is 0% until July then its moving to 16.9%

I see your point about the loans. Perhaps its not worth including the 5.6% one.

You know when you've just had money going out of your account for so long your sick of seeing the same numbers?

I'd need to do the math, but if i can pay an extra £600 a month on top of say a £400pm 12m loan payment, the interest rate which i expect to be over 14.5% should be negated by the rate/size of overpayments i will be making.

jonjamie1970

Great start !! I'm in a similar boat to you, I earn slightly more but am throwing everything at the debts I have to be cleared by the end of this year. In 2008 my parents gave me a £20k sum of money which cleared a lot of debt otherwise god knows where I would be now, I hate to think. Im sad to think thats where the money went but please its "saved" me, good luck on your path and dont forget to cut up those cards if you consolidate !!!!!

josephine82

I would ignore the £250 overdraft with First Direct- treat this account as a new account where you are NOT allowed to go into the red at all. With the extra monthly payments you are going to be able to make, I personally don't think it is worth it.

The loan sounds ok within reason, depending on the interest rate and the term. Usually we say against consolidation loans because they don't usually fix the overspending problem, but if you can sit down and do the math and make it work for you, then go for it.

Might be worth keeping the Virgin card open for a while after you have paid it off, and then see whether they might give you a new o% of low interest offer for balance transfers, rather than including the credit card in the loan?

Sounds like you are thinking about it and trying to find the right situation for you- which is great. For now I would focus on your budget and getting the Virgin credit card paid off asap.

Well done so far :j

Jo x