I'm about £6.5k in debt - what do I do?

crispsandwich

I qualified as a nurse last year, and stupidly didn't clear the £3k overdraft I have with my bank. I then needed a new laptop, and was only working 30 hours per week and couldn't afford to buy it outright, so I got a credit card. Anyhow, I currently owe £3k on the card, due to a few impulsive decisions. I owe around £6.5k at present, with the card and overdraft.

I also intend to top up my nursing diploma to degree level, and will need roughly £1.5k to do this. It starts in May.

I have applied for a personal loan of £8k to pay back over 5 years, but the offer I got was almost 20% APR, so I'll be paying back around £12k over 5 years.

I would ideally like to clear my debt quicker. My hours were increased to 37.5 weekly a few months ago (temporary until April), so when I applied for the loan I took into account that I could pay roughly £200 a month after bills and rent (assuming my hours are reduced back to 30 per week).

At the moment I'm currently paying back £141 on my credit card, £51 per month for overdraft fees and then around £50 interest on my card. To complicate matters further, I missed a payment on my card (it was the fault of Halifax - a standing order which had been paying for months disappeared without a trace) and so it has affected my credit score.

Does anyone have any suggestions, other than a personal loan? I'm after some impartial advice, as I don't fully trust my bank.

Thanks for reading

psychopathbabble

Ok, first off all you could fill in this: http://www.makesenseofcards.com/soacalc.html so everyone can get a clear idea of your income, outgoings and exact debt.

There might be ways you could cut back that you haven't thought of. I'm a bit confused, did you take out a bigger loan to get a better interest rate?

It's never usually a good idea to borrow more debt to pay off old debt as it allows for you to run up more debt.

Learning2Budget

Can you pick up any bank shifts or join an agency? Fitting in one or two shifts a month could increase your money. Giving you more money to over pay on your cc.x

cpjackso

crispsandwich wrote: »

To complicate matters further, I missed a payment on my card (it was the fault of Halifax - a standing order which had been paying for months disappeared without a trace) and so it has affected my credit score.

If you do an SOA you will be able to see where you can pay extra.

If you take out a personal loan to pay for your owings, make sure you take one out which doesnt penalise you if you pay back early.

Your overdraft is probably less than 20% APR - so there is little point in moving the overdraft debt (in fact, it would probably cost you more money!).

re: the halifax card - are you sure the missed payment has affected your credit report? If so - I would be writing some angry letters to them to get them to fix the damage they have done (presuming its their fault, as you stated) - and get them to pay you a few quid as an apology.

Oneday77

I suspect the Halifax SO disappeared around 20/12/2011 onwards. The new faster bank payment system screwed up all Halifax SO. Check your statement the money probably left but came back the same day. It's their fault so an easy fix if you report it. I know mine bounced like that, apparently they needed a new Sort Code issued.

Your best bet is to avoide a consolidated loan, slippery slope. You pay the OD and cc off, don't cancel them and a few stray spends later your £14.5k in debt with loan, cc and OD full. Try and budget, overpay the cc each month, pay your course fees with the card. Then destroy the card and pay it off as fast a you can by over paying again.