Girlfriends Debt

megamuel

So for the last few years I've saving/investing what little money I could only to now find that over the same time my girlfriend has been getting in to debt :mad: Anyway, I'm trying to remain calm and help her as best I can. I don't know much about loans/credit cards/debts as I've only ever had an overdraft so I thought I'd ask here to see what options she has. It's not a huge amount of debt but we are both on low incomes so it's not something we can easily pay off either.

Basically she had 2 credit cards which she used to their limit, then she got a loan to pay them off, then she used them again! So she now owes £1800 on her credit cards and has a loan with about £4500 to pay. She's been to see the bank last week to discuss getting a loan to pay everything off because at the moment, after her paying her loan repayments she only has enough to pay the interest on the CC's but the interest rate on the loan they have offered is 19.95% so she would end up paying over £2000 in interest which I am not happy about!

I've seen better loan deals online from the likes of Sainsbury's, Tesco, Zopa etc. These have APR of 7.6-8.3%. Why the big difference? Also, is it possible to get a loan from one lender to pay off debts with another lender/bank? Or is the customer tied in to only be able to use loans from the bank they have the debt with?

The other option is to use my savings/investments. My shares aren't doing too great at the moment but I have probably just over £4k and another £1k in my bank. I think she has £500 in a savings account somewhere too. Would it be better to use this then have her pay me back? I'm not too happy about using my money to pay off her debts as I intended on keeping it invested for as long as possible, but I'd rather use that than have her pay an extra £2k in interest. Maybe I'll just charge her £1k interest

Anyway, I really don't know what to do so any advice would be very much appreciated.

Thanks in advance,

Sam.

missile

She has been living beyond her means and it seems unlikely she will learn to be more frugal. You cannot afford a high maintenance GF and your best option would be to ditch her.

HappyMJ

Missile's advice is straight to the point but is accurate.

Do not borrow more money to pay off the credit cards she will only use them again and in 6 months time she will owe twice as much. She must learn not to spend and if the only way to do that is to default on her credit commitments so she is no longer offered credit well that's what it has to be.

Do not use your invested money to pay off her debt in the hope she will pay you back. You will lose it. When you marry her then think about that but not whilst she is your girlfriend.

Steel_2

Do you live together?

If not, I would seriously not give her your hard earned cash to pay her debts off. By paying off her debts for her she'll learn nothing about why she's in debt or how to ensure she doesn't get into it again apart from getting someone else to pay it off for her.

If you do live together, I would be looking to take on more of the household bills so she can devote more of her income to debt payments, or encourage her to get a better paid job or a promotion at work.

But my feeling is she is using the cards to pay for little extras that us girlies like (;)) and you'll find it tough to get her give up on that. While you've been scrimping and saving, she's been supplementing her income to afford all the things she thinks she deserves.

You have to change the mindset or the situation will simply happen again.

I've heard my sister once say (while she was spending on her credit cards) "I work very hard all week and I deserve something nice". That was her rationale for spending money on her credit cards.

Oh and don't feel tempted to be chivalrous and take out loans and cards in your name to transfer her debt onto. If you split up, you'll be dumped with the whole lot.

Housework*Fairy

It only seems to be loans of above £7500 where you get the lower interest rates.

DVardysShadow

megamuel wrote: »

The other option is to use my savings/investments. My shares aren't doing too great at the moment but I have probably just over £4k and another £1k in my bank. I think she has £500 in a savings account somewhere too. Would it be better to use this then have her pay me back? I'm not too happy about using my money to pay off her debts as I intended on keeping it invested for as long as possible,

Mad even to consider it. You have seen what she did with the loan. Most likely outcome is for her to clear some of her debt pile and start building up more debt, leaving no way to pay you back. After which you feel uptight and she won't understand why. Then you split up and you are minus GF and no chance of ever seeing your money again.

Your best chance of keeping her is to be quite prepared to let her go if she does not sort her money out.

LittleMissGiggles123

Don't pay her debts off for her & expect her to pay you back. Just read all the stories on these forums about the problems people have had with family/friends/partners borrowing money & not paying it back.

Best thing to do is sit down with her & work out a repayment plan on her debts. Work out a monthly budget for her & see how much money she can afford to throw at the debts to pay it off as quickly as possible. A budget will hopefully help her to stay on track too & then when debts are cleared, she can start a savings plan too.

Yes it's not great that she has to pay all the interest now, but it is her fault, not yours.

The low interest rates you've seen are not guaranteed for everyone. So even if your gf did try one of those ones, she may still be offered a higher rate.

nifferwilko

Sam,

I just wanted to echo what everyone else is saying - don't use your money to pay off your girlfriend's debts. You haven't mentioned how long you've been together, but even if it is a long-term relationship and you are completely committed to one another, I personally wouldn't do it.

megamuel wrote: »

I'm not too happy about using my money to pay off her debts as I intended on keeping it invested for as long as possible

And because you've said this ^, I think even if you decide to loan her the money, it will cause a lot of resentment in the relationship, even if it is unintentional. People's relationship with money is a very strange thing...

megamuel wrote: »

I've seen better loan deals online from the likes of Sainsbury's, Tesco, Zopa etc. These have APR of 7.6-8.3%. Why the big difference?

Probably because you're on a low-income, you'll be classed as higher risk. Unfair, yes, but it's their money.

I think the best thing you can do for your girlfriend is just to continue offering the (moral) support you have been and help her deal with her debts. No one's suggested it yet, but perhaps you can sit with her and do a SOA to find out how much she has coming in/going out. If there really isn't enough to cover her debt payments, she probably needs to go to CCCS to sort out a debt management plan.

carslet

my view and i have done it myself, if she can't control the spending then have to cut the cards up, don't pay it off for her she will never learn from it, and just do your best to pay off even a little extra of the CC even if only a few £

i once years ago was paying off a partners £1600 CC debt at 400 per month (yes i also had a CC debt myself) and after 4 months of paying it, the balance was £1400 she just carried on using it, so i stopped paying it dont 't know what it is not seen her for about 4 years now, :beer:

bargainbetty

Please, listen to all the advice on here. Do not use your savings, do not take out any joint finance (including new cards), just offer the moral support to her. She needs to sort out her own finances. People are finding it much harder to get consolidation loans, for the exact reason your GF has demonstrated - people don't use them properly and increase the debt overall.

If she sits down, works out her income and expenditure, cuts up the cards and sets herself a budget, then perhaps treat her to small gifts or dinners etc to help her feel loved, but don't hand over your money. Mine went. So did that of others.

The moment she asks/pleads for you to fix the problem for her by paying the debt, run like hell.

Good luck x

carslet

bargainbetty wrote: »

Please, listen to all the advice on here. Do not use your savings, do not take out any joint finance (including new cards), just offer the moral support to her. She needs to sort out her own finances. People are finding it much harder to get consolidation loans, for the exact reason your GF has demonstrated - people don't use them properly and increase the debt overall.

If she sits down, works out her income and expenditure, cuts up the cards and sets herself a budget, then perhaps treat her to small gifts or dinners etc to help her feel loved, but don't hand over your money. Mine went. So did that of others.

The moment she asks/pleads for you to fix the problem for her by paying the debt, run like hell.

Good luck x

this is the perfect answer