Advice on clearing 5k of debt

chr412

Basically I've left uni with a bit of a crap situation. I was stupid with my money and now I'm paying for it, but I'm trying, so bare with me. I'm gonna try and be as in-depth and honest as I can here. Looking for some good advice on clearing 5k or so of various debts. I'll start off by listing them, then my incoming/outgoing for the month, then I'll go for the questions I have.

Debt - Amount
HSBC Overdraft - £1250
Natwest Overdraft - £1250
Capital One Credit Card - £800
Vanquis Credit Card - £500
Studio Account - £1000
(Not including my HP on my car which isn't a problem)

Incomings £1050 a month
Outgoing - Amount
Rent - £225
Car finance - £215
Petrol - £130
Other bills (council tax, phone, gas, electric, water, etc) - £250ish

Minimum payments
Debt - Amount
HSBC - None
Natwest - None
Capital One - £40
Vanquis - £40
Studio - £60

I'm covering the monthly payments at the minute, but that's not really chipping away at the debt too much, and it means me permanently being up to my overdrafts (more on that later..) so here's some questions I have.

1) The overdrafts. I was told after I left uni that each year the level of overdraft would be reduced until I had none, which I was cool with. However, if they try and reduce the limit when I'm right up to it, what will happen? Can they just reduce it then go 'youre £200 over your limit' and start levelling charges at me?

2) The two credit cards. I've had the Capital One a long time and want to keep it, but I want to get rid of the Vanquis one ASAP. Should I ask Capital One and Studio for 2-3 months off paying them so that I can get my Vanquis card paid off and get rid? Would Capital One and Studio let me do that?

3) Is the above scenario the best thing to do, or should I just crack on paying the minimum payments on everything? If I pay all of them I can only afford the minimum, which is where I'm stuck now really.

4) Are there any sort of debt hints, tips, tricks people can offer? If I close an account (Vanquis) does interest continue to be added, or can I set up a deal with them whereby they close the account, stop the interest, and I pay say 10 monthly payments of X amount until it's written off? Would this affect my credit score?

5) Is applying for a loan worthwhile? I recently applied for a £5k loan with HSBC to clear it and got rejected, not overly sure why to be honest, you'd figure clearing your debts would be a decent reason to get a loan out. I'm wary of loans because surely the amount of interest on the loan would be just as bad as the loans on the current outstanding stuff. Would applying for a £4k loan (which would clear studio, capital one, vanquis, and most of the overdrafts) or a £3k loan (just to clear the three accounts) be a good idea at this point? Would I be automatically refused simply because I applied for a loan in the last week or so? I figure a £4k loan over 4/5 years wouldn't be more than the £140 a month I'm paying in minimum payments to Studio/CapOne/Vanquis so would help me then knock off the overdrafts too.

6) The car finance has 3 years left on it in June. Once I start paying the other debts off, if I pay extra on my car will I get penalised anyhow? As in, if I pay it off early will I still have to pay the same amount of interest, or would there be some savings in it for me paying it off early? I get paid 13 times a year (4 weekly) instead of 12 so was planning on throwing the extra payday each year at my car loan to knock a decent chunk off it.

Thanks a lot for any and all help/advice offered. I shall keep this thread updated on my progress, if nothing else than to stop myself falling behind on my repayments and stuff, as it would be embarrassing to have to post about it. A year or so and I plan to be out of most of this debt (or at the very least, the two credit cards and Studio).

Thanks!

cte1111

What are the interest rates of your cards / Studio? It is best to repay the highest interest ones first.

cte1111

If you do a full SOA with this link and post it, then I'm sure people will be happy to help suggest areas that you can cut back. To me it seems as if you can't really afford to have a car on HP, as you aren't currently earning enough to repay your debts and pay the HP.

http://www.makesenseofcards.com/soacalc.html

bravobeastie

Studio, unless you pay by dd is 44.9% a month.