loans

fatboypaul

not sure were to post this but here goes
i have spent the last few years living it up and built up some bebt
i have two credit cards, a overdraft and a loan totaling £17000
i make about 18000 at work
because i have used my creditcards for cash advances my credit rating has gone down to 825
what is the best way to reduse this as the banks are asking me to cut my overdraft by half and i am worried i wont be able to do this in time
i have no other outgoings
if i could consolidate the debt over 5 years it would cost about £350 a month and i would be able to do it with ease but im affraid to apply for one as it will affect my credit rating further.
any ideas please. thankyou paul

DCFC79

Why not complete an SOA and post it on here,

fatboypaul

whats a SOA

Tixy

It is very unlikely any lender will consider a consolidation loan given the figures you have posted. You already owe a very high amount compared to your salary.

A SoA is a statement of affairs - a list of income, outgoings and debts using this calculator - http://www.makesenseofcards.com/soacalc.html. It allows you (and the people here) to see your full situation and advise how you can manage debt repayments and prioritise the debts in the right order.

Awooga-Awooga

In the same boat my friend. GL

Tixy

fatboypaul wrote: »

i have no other outgoings

Sorry - just seen this bit - do you mean literally you have nothing else to pay out other than debt repayments? that someone else pays all your housing/food/transport/phone/entertainment/clothes etc?

fatboypaul

Yes currently living with parents £75 a week

my soa is
loan £11500
overdraft £2000
overdraft £310
creditcard £1200
creditcard £2300

Tixy

What are the APRs on all the debts?
What are the limits?
And the minimum payments on each?

So are you taking home just over £1230 a month? and paying board of £325? So are left with £905 you can put to your debts?

What are the minimum payments on each card plus the loan repayment? and so what do you have left to reduce your overdraft by?
How long have your bank given you before half your overdraft is recalled? Looks like you could perhaps repay half the overdraft within a couple of months or 3. And then after that you can focus on paying the debts in interest rate order.

A consolidation loan costing £350 a month doesn't look like a very sensible idea - you'd be paying much more in interest over those 5year than you need to if you can put £900 to your debts each month. Far better to clear the debts quickly whilst your living costs are so low.

fatboypaul

Loan £11500 £318 per month
creit card 18.9% £2300 £ 50 per month
credit card 29.9% £1200 £ 50 per month
overdraft 18,9% £2000 reducing £50 per week
overdraft 18.9% £310 reducing £10 per week

phone contract £25 per month ends june 2113
car insurance £25 per month ends feb 2113
board £75 per week
i have no credit in the bank.
Thats why, i would like to consoldate on to one payment
i could then cancel my cards and overdraft and get myself back into credit

Tixy

A consolidation loan is extremely unlikely given that you already owe almost a years income.
The best way to work out how much you can afford and a plan of action is to do a monthly SoA - below is an example based on the information you have posted.

Income £1230

Phone £25
Car Insurance £25
Other car costs (fuel/road tax/servicing etc) £X?
Board £325
Other costs £?

Left for debt repayments £855

Loan £318
Card 1 £50
Card 2 £50
Overdraft1 £216
Overdraft2 £43

Minimum debt repayments £677

Surplus £178 (for other costs or additional debt repayments)

Are the overdraft holders happy with the current level of repayments?
Or have they actually recalled some of one of the overdrafts? If they have and you can not afford it you may need to write to them with a proposed repayment plan you can afford. This may affect your credit file, but if you don't have the full amount they wish to recall and cannot raise it then it may be your only option.

If they are recalling your overdraft and you need to set up a repayment plan you could always open a new bank account with a different bank - without an overdraft and have your wages paid in there. You would then have money in the bank all month - and could set up standing orders to the existing 2 overdrafts and they would then feel more like 'normal' debts.

There is no easy answer - and on your income level it is going to take quite some time to pay off your debts unless you can raise additional money perhaps by increasing your income or selling anything you no longer need?
But as you say in your first post - it took you a few years to build up the debt, so is likely to take a few years to pay it off.

fatboypaul

Thankyou for your advice
im aware it will take a while hopefully i can do it in 4-5 years. Thanks