Loan repayments too high! Can I change?

nomorecreditcards

Hi all, after uni I got myself into debt and after a while of being overdrawn, and having several credit cards to pay off I thought that the best thing to do would be to get a loan for £11500 to pay off £314 a month over 3 and a half years. I really thought about the amount versus wanting to get rid of the debt as soon as poss.

Anyway I bought my first house at the end of January and I'm paying a mortgage of £380 a month as well as all other bills, insurance etc (I live on my own) and I'm finding it really difficult to keep my outgoings below my incomings before I factor in anything that could be considered a luxury (clothes, going out, holidays etc). I have put to one side £200 for food and £200 for petrol and then this equals to roughly my monthly wage after all bills have been accounted for.

I am wondering if it possible to go to Tesco Bank and ask to take the loan over an extra year or so, so that the repayments will be easier to manage, or will this not be possible with a loan?

Apologies if this question has already been asked.

Thanks for your help.

Steph

Tommelise

I dont know if it is possible to change the loan, but I am sure somebody will be able to answer that question for you.

I just wonder if you have looked at all other possibilities apart from changing the loan.

In my opinion 200 £ for food for a single person seems at bit much, and you should be able to trim that amount.

Wy not head over to the Debt free wannabee board and post your SOA. That way you will get help to reduce your outgoings.

Margey

Hi,

in the truest sense only you would know how much you need for food and petrol but i agree with Tommelise that £200 does seem a bit high for just one person.

From my knowledge i think it may be possible to changes lenders but you may need to settle up with one instead of transferring the loan. But it would be better to talk to your bank to make sure, and also see what your options are. A financial advisor may not be a bad idea too.

I hope this helps

Margey

Tixy

Your lender may agree to refinance the loan over a longer period (though they may not) - if they do this would likely be subject to a new credit check and could well have a higher APR than you are paying now. Coupled with paying it over a longer period it could end up costing you a lot more in the long run.

Before you decide to take this action do look carefully at all your other outgoings to see whether you can make savings anywhere else.

As someone has already stated £200 does seem a lot for food for 1 person. There are some people who are able to manage on less than £80 a month for food, but maybe if you aimed for £100-£120 it would mean you would be able to better manage the loan repayments.

In terms of your petrol - are you ensuring you get the most miles for the money you are paying - maybe have a read of -
Cheap Petrol & Diesel Cut your fuel spend by a third

As suggested it might be worth preparing a statement of affairs for you to look through to see what you may be able to reduce a bit, or if you are struggling to spot any savings you could post on the debt free wannabe section where people should be able to help you find sufficent savings to be able to afford your loan repayments and get rid of the debt as soon as possible.

pheonixrising21

As many people have said, your food budget is way too high. Myself and my fiancee have a budget of £250 between us a month and we always come in under that by about £50. And we include meals out/takeaways in our food budget... If we didnt go out for dinner or have takeaways we would probably come in around the £140 mark a month.

With food, things like bolognase, chilli, stews, soups, etc can be made in large batches and frozen in meal sized portions. then just cook rice/pasta/potatoes/veg fresh as required, along with one of the pots.

nomorecreditcards

Thanks everyone

Yeah I agree with what you're saying and think I need to plan my food shopping more and trim away some cost here first before trying to change my loan. (I obviously include all stuff like toilet rolls, toothpaste, washing powder etc etc in the £200 too). However I do think that I can do it cheaper than £50 a week.

Regarding petrol, driving to work and back is only about 16 miles a day, and sometimes I drive say 500 miles a month whereas other months I might only drive 100. I do get my mileage back but not till the end of the next month so its a bit harder to keep track of.

Thanks for all of your help, I will head over to the debt free wannabee board and see if I can save a bit of money

markwilkinson

I think your doing the right thing. Assuming you have a perfect credit rating then it shouldn't be an issue to get a new loan out, spread over 5 years for example and then pay off your Tesco loan with it. However, it might not be at as good a rate and ultimately you will pay more interest. You should be able to cut back by enough to make the current repayments a bit easier to bear.

bigadaj

Have you thought about renting a room if you have a spare room, this could three hundred quid month tax free, which could tide you over until the loan is repaid.

nomorecreditcards

Hi, yeah I have thought about this as I have a spare attic room. Want it to be the right person though, and none of my friends need to move at the min. Gonna keep in mind tho

Loanranger

When I was in your situation, mortgage to pay, living alone, spending outstripping income and a loan to repay, I got a part time job in the evenings and at weekends as well as my day job. I worked in bars mainly. It was hard but the only way I could get out of the mess was to earn more. Working for long hours also meant I didn't have the chance to spend anything.

nomorecreditcards

Yeah may consider this. I earn quite a good wage so worried I would get taxed a lot but could look into it. I sing so have been trying to get into that again but its hard to get the right set up. I also want to start selling some clothes and shoes on ebay so going to try to get motivated to do that