I don't know the best way to get out of debt quickly

Dopez2

Hi,

Hoping someone can help..

Basically i owe the following: £2500 debit overdraft, £1500 credit card, £4000 to family members who need the money (they've been made redundant, one has emergency housing repairs etc).

I accumulated this debt because i was made redundant and had to go freelance for 3 years and struggled alot financially. I am now in permanent employment taking home £1668 after tax a month but have about 1000 in outgoings.

The debit overdraft is 15.9% as and the credit card is 18.9%

However i need these debts cleared asap! I went to my current bank HSBC, who offered me a loan of £8000 over 4 years but at 15.9%...

Is there an easier way??? Such as a balance transfer or something?
For the 8000 loan i would pay 2600 in interest! Don't want to do that unnecessarily unless it is the only way round this.

Can anyone help???

Tixy

What loan term did you look at with hsbc?

Can you definitely afford £668 a month towards the debts? does the £1000 include all your outgoings?

£8000 at 15.9% over 18 months would only cost you £1044 in interest, the repayments would be £502 a month.
Or over 24 months they would be £392 and cost you £1392 in interest.

Regarding balance transfers - only a few credit cards allow you to transfer in to your bank account (to pay off your overdraft and your family loans) - and even if you could get accepted for a 0% one might struggle to get one with a high enough limit to cover all your debts.

You might want to see if you could find a cheaper loan elsewhere (but don't apply to lots of different places as you don't want lots of searches on your credit file, you could maybe try nationwide as they do a soft search quote which does not leave an application search on your credit file).

Cycrow

i assume the debt to family has no interest ?
might be worth talking to them to find out much a month you can get away paying them while you clear of the rest of the debt.

you could get a balance transfer card with 0% and transfer the credit card over, then focus any extra money a month on the overdraft.

the 1000 outgoing, does that include everything you need, like food a such ?
and is there anything you can cut down on.

having about 650 a month should allow you to clear the debt pretty quickly depending on how much and when your family need thier money.

i wouldn't get a loan at 15.9% its not worth it and will cost you more

busybumblebee

If you are able to get a credit card with 0% interest, I got a card with Fluid (part of MBNA) and they do pay it into your bank account, but there is a 4% fee connected to it. I think they have a 24 month offer on at the minute for new customers and you can do a preliminary check to see if you're likely to be accepted. I got an automatic £6000 credit limit with them, but I know I have a good credit score (I have about £3000 debt, but never missed payments or anything).

I'd definitely try to look at other options than the loan, if you can. If you can, do an SOA on here, people are so helpful at looking for ways for you to save money to speed up paying your debts off.

Good luck

RAS

Dopez2 wrote: »

Basically i owe the following: £2500 debit overdraft, £1500 credit card, £4000 to family members who need the money (they've been made redundant, one has emergency housing repairs etc).

I accumulated this debt because i was made redundant and had to go freelance for 3 years and struggled alot financially. I am now in permanent employment taking home £1668 after tax a month but have about 1000 in outgoings.

The debit overdraft is 15.9% as and the credit card is 18.9%

However i need these debts cleared asap! I went to my current bank HSBC, who offered me a loan of £8000 over 4 years but at 15.9%...

You need to start by realising that taking out a loan of £8000 to "pay off" 4 other debts is not going to get you out of debt. It is going to increase your indebtness by £1000 to £1500.

I would suggest that you put up a proper SOA on here and that you think urgently about what you might be able sell that would raise some cash.

How much do you owe to the person needing to do repairs?