Ok so i need help now.

jamesd

dancingfairy wrote: »

Oh and instead of dealing with the debt as has been suggested you have now got 2 loans - honestly you couldn't make it up - could you. 20%

That's 20% of the previous APR, much more than just 20% but still a huge improvement that'll clear the capital in a predictable time instead of eating all the money in interest and fees and never getting rid of the debt.

That was one of the ways suggested to clear the debt. Not as cheap as the DMP but still a lot cheaper than before and without the adverse credit affects of several loans reporting being in arrangements instead of paid off normally.

Also worth noting that some doorstep lenders don't have large penalties and costs for missed payments, so the risk factor may have dropped a lot as well. Provident, for example, has no penalties at all for a missed or late payment. Doorstep lenders are very expensive but they often beat bank penalties or payday loans that are continually repeated.

Not keen on the bank sales but it is possible that the bank person was telling enough of the truth. The helping with the credit rating in general is rubbish but it may still help with the discretionary part and the bank's internal scoring. We'll have to wait and see on that. If it gets a £500 overdraft facility in six months that'll save significant money because the overdraft will be cheaper than the loans. That may make paying off the last six months of the 12 month loan and using the overdraft instead cheaper. If it happens. We'll see.

It's possible that both product sales were mis-sales. I think the insurance probably was if an overdraft facility isn't forthcoming. I'm not so sure about the ISA. A little in savings is useful even with debts - you need _some_cash available so you don't feel you have to go to a payday lender again for a small emergency. It costs in interest paid that could be avoided but the opportunity cost of not having the money available could be much higher. Assuming it's £5 a month and the loans are at 400% APR (and all interest, none of it fees) then the interest cost is about £30 to have the £30 available after six months. Expensive, but possibly worth it. It's easy to pay much more in fees that could be avoided by having that £30 available.

Hard to say whether the lack of arrangements means that this will ultimately be cheaper or more expensive than the DMP approach. Depends on future credit use. Either way, it's welcome progress and a huge improvement that changes things from unstable and heading towards failure to stable and improving.

the_seraphim, please do accept the SOA invitations. The people here are good at finding savings. You don't have to take the DMP or nothing route to solving your problem but there's nothing wrong with getting suggestions about how to save money and picking the ones you like.

Good to read that your employer finally got his act together on the BACS setup. That's one more risk gone.

Assuming you don't get a better deal and can overpay on the loans, please do say something more about the terms of the ones you get. Normally you'd want to make any overpayments on the one with the highest interest rate (not highest APR - APR includes fees that you may have paid already to set up the loan). But sometimes features like no penalties for a missed payment can make it less risky to pay off the lower interest rate one. Depends how much safety margin your budget ends up having. If it's plenty then the higher rate is the way to go, if it's close, then the other one might be better, depends on how big the difference is.

End game for you should be debts gone, overdraft facility (unused) available and later credit card available but either not used or paid off each month. And savings accumulating. Then you[ll be able to use the card, savings and overdraft facility to cover future short term emergencies, instead of payday loans. Will take a while to get there but at least it's heading in the right direction now.

eschaton

£50 for Virgin, £50 for a mobile, no wonder the OP is up to eyes in debt.

Then fleeced at the bank.

OP needs to wake up and prioritise.

Decluttering

Why does your cheque take 7 days to clear? Could it be the type of account that you're trying to pay it into? I recently looked at my bank's guidelines for how long a cheque takes to clear and was suprised to find that by requesting it be paid into another account I had instead of the one I'd previously been requesting, I could have the money cleared in my account in 3 days instead of 5.

Is your account with the same bank as your employers? I think this may reduce the time, if not it might be worth investigating how long a cheque would take to clear if you had an account with them. It's not going to be instant credit into your account but if a couple of days makes a difference it might be worth considering and would save you paying 6%.

jamesd

It is worth wondering whether the penalties are more or less than the cost of keeping those things at their current level.