Options on debt? (Consolidating).

Majestic

The wife & myself sat down recently and drew up a list of our outgoings. Mainly because our borrowing was starting to get a little out of control.

As you can see below, our borrowing (debt) is around the £9,000 mark and it is the hope of the missus to get a loan and consolidate.

Before I make the leap tomorrow and apply for loans, I was hoping a few of the more experienced members/advisors would give their opinion (if any) on how to tackle or approach the figures below differently, then how we plan to.

To add, we are in the market for a car. Our banger is now nearly 15 years old and the term 'flogging a dead horse' applies greatly here.

Should we go ahead with the loan, we are looking to borrow £12 to £13k at around the 7% mark.

In the meantime, other options & opinions greatly appreciated.

taffy056

It's not wise to take on more debt if you are struggling now, also debt consolidation often don't work as intended.


Why not place up an SOA so we and you can see where your money is going first, people can then offer some advice, just format the results for MSE



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

Majestic

Cheers Taffy, regarding the SOA, would the information below my post suffice?

That has all our outgoings wotnot.

woohoo_postingid

I, along with most others would suggest completing the SOA as it lists a lot more things than you might initially think of. Although even looking at what you have posted, I can immediately see room to reduce your outgoings.
By reducing your outgoings, you will have more money to throw at your debt.

Please don't apply for any loans yet

Majestic

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1250
Partners monthly income after tax....... 1100
Benefits................................ 80
Other income............................ 0
Total monthly income.................... 2430
Monthly Expense Details
Mortgage................................ 360
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 105
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 37
Telephone (land line)................... 11
Mobile phone............................ 53
TV Licence.............................. 20
Satellite/Cable TV...................... 33
Internet Services....................... 45
Groceries etc. ......................... 300
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 78
Car maintenance (including MOT)......... 0
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...................... 45
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Natwest Loan............................ 119
Mum Loan................................ 75
Total monthly expenses.................. 1511

Assets
Cash.................................... 0
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 100500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 82000....(360)......3.9
Total secured & HP debts...... 82000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
BOS Credit Card................1674......45........21.9
Faith Card.....................180.......0.........0
Santander......................564.......80........22.44
Overdraft......................1500......35........18
BarclayCard....................2350......75........24.9
Capital One....................1000......100.......34
Capital One....................500.......100.......30
Very.co.uk.....................950.......40........39.7
Sofa...........................240.......0.........0
Total unsecured debts..........8958......475.......-

Monthly Budget Summary
Total monthly income.................... 2,430
Expenses (including HP & secured debts). 1,511
Available for debt repayments........... 919
Monthly UNsecured debt repayments....... 475
Amount left after debt repayments....... 444
Personal Balance Sheet Summary
Total assets (things you own)........... 100,500
Total HP & Secured debt................. -82,000
Total Unsecured debt.................... -8,958
Net Assets.............................. 9,542
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

Majestic

I'll now be away from my desktop until later this afternoon, but again I appreciate feedback.

Many Thanks.

woohoo_postingid

Majestic wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1250
Partners monthly income after tax....... 1100
Benefits................................ 80
Other income............................ 0
Total monthly income.................... 2430
Monthly Expense Details
Mortgage................................ 360
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 105
Electricity............................. 60 - Check you're on the best tariff
Gas.................................... 60 - Check you're on the best tariff
Oil..................................... 0
Water rates............................. 37 - Would you be better off on a meter ?
Telephone (land line)................... 11
Mobile phone............................ 53 - Is this neccessary? Can you reduce the tariff?
TV Licence.............................. 20
Satellite/Cable TV...................... 33
Internet Services....................... 45 - Very high for broadband. Shop around for a better deal
Groceries etc. ......................... 300
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 78 - Very high, especially if you have an old banger like you say.
Car maintenance (including MOT)......... 0 - You need something here
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 - You need something here
Contents insurance...................... 45 - High
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0 - You need something here
Haircuts................................ 0 - You need something here
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0 - You need something here
Natwest Loan............................ 119
Mum Loan................................ 75
Total monthly expenses.................. 1511

Assets
Cash.................................... 0
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 100500

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 82000....(360)......3.9
Total secured & HP debts...... 82000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
BOS Credit Card................1674......45........21.9
Faith Card.....................180.......0.........0
Santander......................564.......80........22.44
Overdraft......................1500......35........18
BarclayCard....................2350......75........24.9
Capital One....................1000......100.......34
Capital One....................500.......100.......30
Very.co.uk.....................950.......40........39.7
Sofa...........................240.......0.........0
Total unsecured debts..........8958......475.......-

Monthly Budget Summary
Total monthly income.................... 2,430
Expenses (including HP & secured debts). 1,511
Available for debt repayments........... 919
Monthly UNsecured debt repayments....... 475
Amount left after debt repayments....... 444
Personal Balance Sheet Summary
Total assets (things you own)........... 100,500
Total HP & Secured debt................. -82,000
Total Unsecured debt.................... -8,958
Net Assets.............................. 9,542
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

These debts are quite manageable. You have spare cash left over each month and this could all be used to reduce the debts. You can reduce your outgoings to assist with this, but it's the cards that are costing you. Look to get rid of the higher apr ones first.

My advice would be to not consolidate into a loan - especially a larger loan than you currently have.

RobertoMoir

I can't say that I'm a big fan of "consolidation" loans myself. I won't say that they never work, but there are lots of people here who have had problems with them, whether obtaining them (if you've borrowed enough to be in financial difficulties and 'need' consolidation loans then you've probably borrowed too much to be an attractive proposition for a lender!) or managing finances properly after they have them.

That said, it appears you have about £450 a month left over from your SOA. I appreciate that some of that will go on the month's odds and ends, especially with a kid, but if you can keep a bit of this back and maybe shave a little from your monthly expenses then you might be able to start paying off some of your debts quicker than you think using the 'snowball' principle explained elsewhere on the site.

As for savings, just a quick glance shows:
Mobile phone............................ 53
Satellite/Cable TV...................... 33
Internet Services....................... 45

Those all seem a bit over the odds to me. You should be able to pay less for each of those services and put that money towards your debt, for example. I know it might not seem like much but I would say you ought to be able to save £40 to £50 quid there just by lowering, not cancelling, the levels of service you have on each of those things. If you can do that in a few other places on your SOA to, and put that to paying off the smaller debts then you'll make a difference quicker than you think.

[Deleted User]

Majestic wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1250 Anyway to increase? Overtime, second job?
Partners monthly income after tax....... 1100Any way to increase? Overtime? Second job?
Benefits................................ 80
Total monthly income.................... 2430[/b]

Monthly Expense Details
Mortgage................................ 360
Council tax............................. 105 Is this over 10 or 12 months-if 10 then multiply by 10 and divide by 12 to get the monthly cost. Also, if 10 months, ask your council if you can pay over 12 months to spread the cost
Electricity............................. 60 This seems high given that you also have gas. Check that you are on the cheapest tariff for your area/usage - often online, duel fuel tariffs are cheapest. Check comparison sites. Additionally check that you are not in credit with either the gas/electric company - and if so claim it back
Gas..................................... 60 As above - also turn the hot water and heating thermostats down by a couple of degrees - you will never notice
Water rates............................. 37Is this a standard payment or a meter? If standard payment, would a meter be cheaper?
Telephone (land line)................... 11
Mobile phone............................ 53This seems high! How many phones? Are the contract? If so see if you can reduce a tariff if still locked in, if not locked in then shop around and compare SIM only and PAYG deals - personally I have switched to giffgaff and I have saved a fortune, worth checking out
TV Licence.............................. 20 why is this so high? Are you in arrears? If so when will you be up to date and back to paying the normal?
Satellite/Cable TV...................... 33Do you really need this? If so, can you drop a tariff, or package?
Internet Services....................... 45 This is VERY high, check other providers. Also out Talk Talk, we receive home phone, internet, including international calls for just over £20pm - you are way overpaying here I think
Groceries etc. ......................... 300This could be reduced, drop brands, meal plan, batch cook - take a trip over to the old style board on this forums for advice on reducing this
Clothing................................ 0Never? not even for child?
Petrol/diesel........................... 100Is this accurate?
Road tax................................ 0Don't you pay this?
Car Insurance........................... 78At renewal shop around - compare companies and see if you can get it down
Car maintenance (including MOT)......... 0Nothing?
Medical (prescriptions, dentist etc).... 0Never?
Buildings insurance..................... 0 ??
Contents insurance...................... 45Is this buildings and contents combined? Compare prices at renewal
Life assurance ......................... 10
Presents (birthday, christmas etc)...... 0Never? Even for child? Birthdays? Xmas?
Haircuts................................ 0Never?
Entertainment........................... 0Nothing?
Emergency fund.......................... 0Might be worthwhile getting a little here!
Natwest Loan............................ 119
Mum Loan................................ 75
Total monthly expenses.................. 1511


Assets
Cash.................................... 0
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 100500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 82000....(360)......3.9
Total secured & HP debts...... 82000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
BOS Credit Card................1674......45........21.9
Faith Card.....................180.......0.........0 Is this really 0%?
Santander......................564.......80........22.44
Overdraft......................1500......35........18
BarclayCard....................2350......75........24.9
Capital One....................1000......100.......34 Second most expensive debt
Capital One....................500.......100.......30
Very.co.uk.....................950.......40........39.7 This debt is costing you a lot in interest, my advice would be to pay the minimum payment to all other debts and to over pay this one as much as you can with the surplus in your SOA until this debt is gone, when this is repaid, move on to the second most expensive debt and pay it off in the same manner
Sofa...........................240.......0.........0
Total unsecured debts..........8958......475.......-

Monthly Budget Summary
Total monthly income.................... 2,430
Expenses (including HP & secured debts). 1,511
Available for debt repayments........... 919
Monthly UNsecured debt repayments....... 475
Amount left after debt repayments....... 444 You have a good amount left in your SOA to overpay the most expensive debt with, and if your SOA is accurate, then the most expensive debt that you have could be fully repaid in just over 2 months!!
If you do not have this amount left at the end of the month then you need to keep a spending diary to find out where it goes - note down ALL spends from the really little things like chewing gum and newspapers, to the really big stuff like mortgage repayments, and everything in between

Personal Balance Sheet Summary
Total assets (things you own)........... 100,500
Total HP & Secured debt................. -82,000
Total Unsecured debt.................... -8,958
Net Assets.............................. 9,542
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

Hi,

I have made some comments above, I hope they help.

D9

Firewalker

Consolidating is a bad idea. Looking at your debt now, I would start hitting the cards in sequence - from the small ones to the larger ones and snowball them (use the monthly payment from the paid cards to pay the others).

You need to have another look at your SOA - there are many entries that are at 0 and they shouldn't be (clothes is one; there is always something there even a small amount). Be absolutely certain that you have the money that is 'left on paper or screen) and use it to start paying down.

Delay buying a car if you could - is this still going? Is there anything really wrong with it? How much would it cost to keep it on the road?

Firewalker

talana

Natwest Loan............................ 119
Mum Loan................................ 75

These should be listed in the unsecured debts section as per the others rather than monthly expenses. You say your total debt is around the £9000 mark but surely that doesn't include these two?

On the face of it, you don't need any great plan to pay off these debts as you have a £444 monthly surplus. Throw that at the debts and they'll soon disappear.
I suspect though that there must be elements of your SOA that are a little unrealistic. You need to be as honest and precise as possible to see the true picture.