Just Advice

TerryTorque

Hello,

Just looking for some advice really, reading some of the other threads on here I can see my situation is no where near as dire as some but I can see it heading that way if I dont sort myself out.

I am 26 and still live at home (I know but I do have a bird so it ain't all bad ) with approx 10.5k debt - one loan with about 7k, 1st card with 1.5k which I pay interest on and another card with 2.3k on which is interest free until July next year.

I pay about £130 on the loan each month - it has 4 1/2 years left on it, 1st card i pay min payment which next month is 35 quid and similar min payment on the other card. I have been chipping away at the 1st card over the last few months - I did owe about 1.9k on it but now with Christmas coming up I am not in a great position to keep doing so until Jan.

Now I know this isn't a massive amount of debt but me and my girlfriend are keen to get a place of our own in the new future and I do not want to go into and make things worse and ending up with crazy debt.

The loan I have is consolidation and I have been considering another to put at least the stuff I am paying interest on into payment - which will be cheaper. Another option is to get a balance transfer card and just put the card i am paying interest onto the new card. Or possible stay as I am and try to get the card with interest on paid off early next year, then chip away at the other one until they are both clear?

I realise I havent helped myself with my lack of discipline but can anyone give me any advice on the best way to tackle this?

thanks in advance

happy_bunny_2

Hello and welcome.

Not my speciality, but sounds like the cheapest way would be a balance transfer card at 0% if you can. Then obviously close the one(s) you transfer.

Didn't see any mention of interest rates for the cards you have that are not 0%

HB

mildredalien

Hiya, I assume you mean you have a budgie or parrot or something right?

If you post up your statement of affairs (SOA - http://www.makesenseofcards.com/soacalc.html) we can take a look and see how you might be able to reduce your outgoings and pay off the debts quicker. I see that you have already taken out a consolidation loan and then racked up more debt on credit cards... so I'd suggest that another consolidation loan might not be the answer!! It's oh so tempting to keep using your now free credit cards for 'emergencies' and you just end up getting more debt. I'd suggest throwing every spare bit of cash at your card with interest until it is paid off, and then tackle the interest free debt. If you end up moving the debt to a new 0% card, I would strongly recommend cutting up and closing down the now spare credit card so there is no temptation to use it again.

MFWannabe

You need to post a full soa before we can advise properly as we need a complete picture of all incomings and outgoings

January20

The danger with (another) consolidation loan is that the cards will be at £0 and it will be very tempting to use them again - unless you are very strong and close the accounts straight away after transfer.

FireWyrm

Unlike some on here I actually believe that consolidation loans have a place in personal finance. It's not the best option for everyone and it takes some kind of willpower to actually make it work, but it might be an option for you.

I suggest you start by destroying your existing cards. I did something similar by shifting a balance to a 0% card and just never learning the new pin number. I can't use the card if I don't know the pin....

Post an SOA and we can comment further. It's very possible that with your small amount of debt (relative, of course, my parents would have died if they had that much debt) and some tight budgeting, we can point you in the direction of being out in a couple of years(ish)

mildredalien

FireWyrm wrote: »

Unlike some on here I actually believe that consolidation loans have a place in personal finance. It's not the best option for everyone and it takes some kind of willpower to actually make it work, but it might be an option for you.

So do I, but I noted that TerryTorque has already gone down the consolidation loan route and has another 3.8k on credit cards since this point (I assume, unless the loan didn't cover all debt at the time). There'd have to be a change in willpower, planning and attitude to debt to make an additional loan work without getting into the same situation again later on down the line. Not saying that this can't happen, I'm sure if anyone really puts their mind to it they can make it work.

TerryTorque

Thanks for the advice so far people - much appreciated. I have only just got round to doing this......hope you can help more

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1555.66
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1555.66

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 130
Rent.................................... 175
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 50
Petrol/diesel........................... 120
Road tax................................ 10
Car Insurance........................... 50
Car maintenance (including MOT)......... 100
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 40
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 835


Assets
Cash.................................... 400
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 2400


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 6700.....(130)......10.4
Total secured & HP debts...... 6700......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
CC.............................1500......35........16
CC.............................2300......25........0
Total unsecured debts..........3800......60........-


Monthly Budget Summary
Total monthly income.................... 1,555.66
Expenses (including HP & secured debts). 835
Available for debt repayments........... 720.66
Monthly UNsecured debt repayments....... 60
Amount left after debt repayments....... 660.66

Personal Balance Sheet Summary
Total assets (things you own)........... 2,400
Total HP & Secured debt................. -6,700
Total Unsecured debt.................... -3,800
Net Assets.............................. -8,100

TerryTorque

And a note a couple of you touched on earlier regarding consolidation loans - I'm on my 3rd and each time I've started out determined for it to be the last but I haven't had the willpower to see it through, so after more thought I am not sure that is the right path for me although in my head I think I could do it I don't trust myself....

The cards have been cut up months ago and I have started to pay the one I am paying interest on off, I'm just not sure if I should move this balance to a new card and close both of my accounts. At least then I would have all my debt in just the two places and could get interest free for 20 months or so.

Thanks again for all your comments.

RAS

Hi
The first question is do you have £660 spare towards your credit paymenets each month? if so you can clear the card with interest in three months and four if you allow youself extravagenmce at Christmas.

If not, where has it gone? Do you ever go out?

curlytop12

hiya.
you have put you have a "secured loan"-what is this secured on if you don't have your own house?