What can we try next?

MrMoneyman

First post here, so hi all!

So my situation is, my girlfriend has built up debts of about 15k spread over 4 credit cards over the last few years, and it's time to try and get it sorted. Having looked over this website i've tried a few things as advised with no joy so far.

I've checked out the rates on her cards, and she's basically paying £500 purely in interest, which obviously is wasted money every month. First thing i've told her to do is focus on the card with the worst rate and pay as much as possible extra each month off that one, but obviously it's going to take years and years before she gets anywhere going that path.

We tried going to her bank to get a loan, but they said her credit rating wasn't good enough so no joy there (although she's never missed a payment or anything like that). Then we tried, shifting the debts all to one of her current credit cards but as expected no joy there, or requesting a better rate which I also held out no hope for. We then tried the soft checking for loans as advised on here for the likes of zopa and nationwide but that's got us nowhere either.

So as far as i'm aware that's pretty much all the options I can see exhausted. The ridiculous thing is she can afford to pay back about £600-£650 per month, but no ones willing to to take her up.

So now i'm considering applying for the loan myself because i'd imagine my rating is fairly good, the only thing that might go against me is a lower salary. Obviously my girlfriend will be giving me the money so in effect my finances don't come into it, but I realise that for a loan application they obviously will. So really i'm wondering if I can include this £600 pound that will be going through me as additional income, or failing that are there any other options anyone can think of that I might not have considered.

Thanks in advance for any help

R_P_W

How much is on each card? What is the interest rate on each card? How much has she been paying off each card every month? Has she stopped spending on the cards?

I empathise with you, but like you say this problem has built up over several years so a short term solution shouldn't be expected either.

Banks won't lend on a loan because they have no guarantee that she will use it to pay off the cards. Even if she does she might spend on them again? I know your going to say she won't do that - but why would anyone want to take the risk.

I would seriously advise against you borrowing to pay the cards off. That debt is then yours and not hers - if things go south between you then you are stuffed!

Find_The_Real

Hello

The main problem I see is you are looking at taking on more debt and this time yourself to sort out a current debt, which is not recommended. Naturally you don't think you will split up but you have to consider that if you do the debt will now be in your name and not hers.


The best thing I can recommend is you put up a SOA so we can see if any cuts can be made to throw at the debt to reduce it down. If you have any spare funds and are wanting to help out your girlfriend then maybe you can take on some extra bills so she pays more towards the debt herself.

http://www.stoozing.com/calculator/soa.php

carslet

i agree with the other posters, dont get a loan, just try your best to throw all you can at the debt, pay the min off all the cards and throw the rest at one with the highest interest, although when I did it, i paid off the lowest card first so to gain a 0% after a few months and transfered what i could from another, in the end i ended up with all 4 cards at 0%

it is a long hard road , but feels so good when you start to see it coming down,

ilovelondontown

While I appreciate your dilemma and the seemingly obvious solution to get a loan in your name and have your girlfriend pay you back, PLEASE do not do this.

It stands to reason that the fact your girlfriend is in this much debt is because she doesn't have the right skills to manage her money, just becuase the debt has been transfered into a different kind of debt there is no reason that it will not happen again.

I know a number of people who were bailed out in similar situations as this and it was only a matter of time before they had new debt to their name.

In order to make sure this never happens again, a person in debt needs to learn the hard way.

MrMoneyman

I appreciate all your comments, and clearly they are all sensible and I can understand what you are all saying.

I absolutely understand the comments about whether we will still be together and such and to an outsider looking in those concerns are understandable, but it's honestly not even remotely a concern I have.

We both live with parents and would have been looking to move in together in the next 12-18 months but this is now going to hold us back, which is what my major concern is now, which is why a faster option is more important to us.

And as far as happening again well she's very much learnt her lesson, so lets put those concerns to one side for the time being.

Oh and no she's not spending on the cards anymore

---

Off the top of my head the breakdown of the debt rounded up is

2500 on one card
2500 on another
6000 on another
4000 on another

The interest rates vary from 17.5% to about 29%, and the total figure in interest payable each month is about £500. She's been paying about £150 aditionally to the card with the highest interest rate for the last few months, but it's barely touching the sides.

So obviously to me as a logical thinker there's £500 being wasted each month, that can be put to better use. So that's what takes me to the loan option, because as far as I can see it's the only other option available.

Maybe aside from taking the 15k myself, we could maybe look to spread the 15k between 3 people at 5k each and that takes the risk down. I know some will say it's her problem let her sort it herself, but if there's an easier, quicker and cheaper option out there it only seem right to explore it

carslet

I dont think the interest on 15,000 will be £500 per month, more like £350 per month, I think you should find out the actual interest rate, and min payments for all the cards, and if you can afford to pay £650 i would think you will have it paid off in less than 3 years. and also learn a valuable lesson, it took me the hard way to learn. good luck with it mate

MrMoneyman

okay, i really could do with everything in front of me but i've got some notes here:

minimum payments on and balances on each card are

Card 1: Minimum Payment £180 - Balance £5500
Card 2: Minimum Payment £112 - Balance £4500
Card 3: Minimum Payment £95 - Balance £2500
Card 4: Minimum Payment £65 - Balance £2500

Moneymash

MrMoneyman wrote: »

okay, i really could do with everything in front of me but i've got some notes here:

minimum payments on and balances on each card are

Card 1: Minimum Payment £180 - Balance £5500
Card 2: Minimum Payment £112 - Balance £4500
Card 3: Minimum Payment £95 - Balance £2500
Card 4: Minimum Payment £65 - Balance £2500

So the minimum payment on all cards totals is £452. You say your girlfriend can afford up to £650 a month in debt repayments. That would leave her £198 to make an overpayment to the highest apr card and start the journey to becoming debt-free under her own steam.

The fact that she has no other avenues open to her means she has exhausted her lines of credit, the risk is too high and she needs to pay off what she has spent. She either needs to reduce her outgoings or up her income to make some serious headway.

lynz68

I definitely would not take a loan out on someone else's behalf no matter who they were.

Could you afford the repayments on a loan of that amount if your girlfriend for whatever reason was not able to? Unfortunately none of us know what is round the corner.

As a rule of thumb banks will not allow available credit of more than half your salary.

It has taken your girlfriend several years to get into this situation so there is no quick fix to sorting it and to be fair she really won't learn from this if she doesn't sort it herself. Although she is not using the cards at the minute there is nothing to stop her starting to use them again. At the very least she needs to cut them up.

If you want to help her can you just not just do it by giving her any spare cash towards the bills not ideal though.

Your girlfriend really needs to post a SOA so that advice can be given where she could possibly make cutbacks.

carslet

your £452 per month will include some off the balance too, i know not a lot.

But I would pay off one of the £2500 cards first and maybe they will offer you 0% after a few months, then transfer what is left on the other £2500 and pay the min on that at 0% which will be probably £25, and tackle the big ones.

once you have paid one of the £2500 this will then free up £65, and your other minimum payment will reduce from £95 to £25 freeing up another £65 towards the debt so you will be paying off around £330 per month off the debt. that is when you will start to see light at the end of the tunnel