Debt Payoff Path

adray

Hi all!

I have lived with repaying loans and lived in overdrafts and just generally outwith my means but not excessively for the past 4/5 years, now I want to clear my feet and change my ways...

Currently my outstanding debts are -

Nationwide Loan - £9000 - Started October 2010 £12k over 44mths @ £342/mth

RBS Loan - £3800 - Started December 2008 £10k over 56mths @ £214/mth

Barclaycard Credit Card - £1450 - Credit Limit £2k debt from October 2011 repayment @ £100/mth

My RBS loan was for my car, then mid 2010 I split from my gf so took a loan to clear joint debts and clear RBS loan however instead of using the money left to clear my RBS loan I used it to put on a taxi with my dad's company (I now have 2)

I am looking to clear off my debt as I am in a better position financially in terms of income -

£2200 (4 weekly) - From my job as an Engineer
£350 - £600 (weekly) - from my taxi's

Both figures above are after tax.

So my question is to you all, should I consolidate my loans and CC into one larger but much shorter loan over about 18 months?

How does it compare to over paying each loan and CC using the "Snowballing" effect? (sure that's what it is called...

My biggest worry is my taxi money is not stable as it is reliant upon drivers working and nothing going wrong with the cars...

What would you do if you were me?

Thanks,
Adrian

adray

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 4
Number of children in household......... 0
Number of cars owned.................... 8

Monthly Income Details
Monthly income after tax................ 2383
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 1500
Total monthly income.................... 3883

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 100
Petrol/diesel........................... 200
Road tax................................ 10
Car Insurance........................... 0
Car maintenance (including MOT)......... 50
Car parking............................. 0
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......................... 45
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 60
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 625


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 4000
Total Assets............................ 11000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
nationwide.....................9000......343.......10.9
rbs............................3900......213.8.....11.9
barclaycard....................1450......40........16.9
Total unsecured debts..........14350.....596.8.....-


Monthly Budget Summary
Total monthly income.................... 3,883
Expenses (including HP & secured debts). 625
Available for debt repayments........... 3,258
Monthly UNsecured debt repayments....... 596.8
Amount left after debt repayments....... 2,661.2

Personal Balance Sheet Summary
Total assets (things you own)........... 11,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -14,350
Net Assets.............................. -3,350

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using other browser.

camuk81

Adray,

A great start and thanks for all the info.

Fist things first see if you can find out the APr of your loans.

When paying off debts start with the highest apr first. Find out which you can make overpayments to and if there are any penalties for paying off earlier this will give you a full lay of the land.

Try popping the info into

http://www.whatsthecost.com/snowball.aspx

Personally I wouldn't consolidate as 85% of people who get this loan end up racking more debt.

As regards your SOa all is looking good just wanted to check a few points to see if there could be anything to be trimmed.

1) Are you living with someone else who contributes toward the rent and bills is there anything due to go up any time soon?

2) How long are you tied into you phone for? Can you shop around for another deal. I've just done this paid out the last 3 months and gone from a £90 bill to £30 bill but there is a lot cheaper on the market out there.

3)You haven't put anything in for Car insurance is this covered by someone else or is this the £45 other insurance? Can the other insurance be shopped around for i.e. is it personal liability insurance?

4) Petrol seems quite high, I presume this is tied into the taxi can you look to slow down a touch or if it isn't for the taxi can you cut back on miles.

Personally I'm guessing unless its on a 0% clear the credit card first that will free up more income then get rid of the card.

Good luck

camuk81

Doh just reread and the apr are there! yep clear the credit card then crack on with nation wide then rbs. But still check on penalty clauses on the loans

Tixy

I'd just focus on paying off the debts you have rather than try consolidation. Your APRs are pretty decent already, you might well struggle to improve on those with consolidation.

As cam suggesst it would be worth putting it all into the snowball calc (either the link given above or if you saved your SoA on makesenseofcards they have a snowball calc on there so you don't need to re-enter it all.

Looking at your SoA are you living with your parents now? Is this likely to continue for sometime with that low cost of living? If so it looks an ideal time to clear your debts.

In terms of the cars - do you run any car yourself personally? Are the costs above just your personal car costs (not the taxis?). Are you insured through a deal with the taxis?

If you can pay £3k a month towards the debts then you'll be debt free in no time, But do check you haven't missed out anything from your SoA that you will need to spend in the next few months, presents, haircuts, holidays etc?

In terms of you worrying about the taxis needing expenditure - Is £350-£600 the cash take on the cars after paying the driver? or is it the profit after all business expenses for them (petrol, insurance, MOTs, maintenance, radio costs, etc etc), and are you putting aside a percentage for your tax bill in a seperate savings account?

adray

Hey guys thanks for the replies...

In terms of rent - I am back living with my dad and I gave him my monthly digs in one go for the year just as it helped him out so don't have that.

Car insurance I also paid off so I never had monthly outgoing on that...

Unfortunately the fuel costs is just me travelling to work and back, I try to always plan trips to the gym and any other things I need to do en route home or to work to reduce my fuel costs...

Ahh so snowball the biggest APR's first? I always thought I should do the smallest debt to biggest debt... Would that not leave me more money to clear the debt quicker as I would pay off the RBS loan quicker and free up that £214 a month that I could put into my debt as well...

I think realistically I will put £2000 into my debt a month which still allows me to put money aside should there be any car issues that require fixing...