Trying to pay off debts with credit union loan?

louisebee_2

Thanks Mara_uk7 and sharp82 that's what I was thinking and of course I understand the drawbacks and what could happen. I just wanted to make sure I was not missing anything

[Deleted User]

louisebee wrote: »

Hi,


I have roughly £4200 in debt How is this debt split? CC's Loan, etc? And what is the interest being charged on each of them? which I would like to pay off. This includes 3 over draftsWhat's the cost of each month? And what are each of the balances?, 1 credit cardWhat's the balance and the interest being charged? and an argos cardbalance? Interest being charged?. This is not including couch repayments (interest free) which I will be repaying until next year.Cost? I also have a car on finance Outstanding balance? interest being charged? and my husband has a loan with halifax which is being paid off at £92 per month.What's the APR? And when will this be fully repaid?

It's getting to be quite a struggle not just day to day (we have a child, renting etc) but its also the thought that I am only paying off minimum amounts most of the time and the overdraft isnt being touched its only bank charges which can be £60 per month! I will be in debt forever as I cant seem to afford to pay any extra to pay off the debt!:(

I wanted to get a loan of around £5000 to pay off some debt so I am going to apply to the credit union, however I do think they will reject this due to stricter regulations they have.

I have a monthly budget which I have used for around 2 years now and if I had used this when I first started working I would be fine!I think it might be time to revisit the budget, as it suggests that you are spending the surplus of the budget on necessities - which means that the budget is inaccurate in the first place. Keep a spending diary for a month or two and note down everything that you buy (I mean EVERYTHING, from a newspaper, coffee, bar of chocolate to the DD's, rent and CTax etc, and everything inbetween). basted on this you will be able to complie an accurate budget based on your current spending, not your spending 2 years ago.

Here is a copy of it-

Wage1: 1172
Wage2: 1228.5
CTC: 81
2481.5
Don't you also have Child benefit?

Outgoings
Rent 400

Car 129How many more payments? What's the interest being charged? Do you also have a pot for car repairs? MOT? Maintenance?

Insurance 60Nothing much you can do about this, just make sure that you shop around at renewal for cheapest available?

Argos 25I am assuming that this is the minimum payment? What's the balance? What interest rate is being charged?

Credit Card 55as above

Very 6as above

Bank Charges 110as above

Loan 92as above

Couch 62as above

phone 1: 32I think that both this and below can be reduced significantly. If/when out of contract then shop around at PAYG. Pay monthly SIM only deals - try GiffGaff - although do a search for all providers and find the cheapest for your usage. If phones ever need replacing just buy the cheapest handset available until you are debt free. Having a mobile phone does not need to be expensive

phone 2: 32

Childcare 130Not much you can do about this

Petrol 100How many cars in the household? Consider if necessary? Would public transport be a viable options? Would make huge savings on month - to -month basis

Food 185This seems reasonable, (I have made the assumption from your posts that this is for 2 adults, one toddler - Is this correct?. Bust also based on your post, it seems that this £185 is not accurate of you are spending your "surplus" on more food and other supermarket spends. Keep a spending diary. Also, try meal planning, batch cooking, cooking from scratch, dropping brands, try Lidl/Aldi etc

Elec/Gas 160This seems VERY high!! Are you in arrears? If not then check whether or not you are in credit - if so claim it back. Also try and monitor your usage - (in winter/colder months) switch radiators down or off in rooms not being used, switch the thermostat down by a few degrees overall, switch things off and don't leave them on standby, use energy saving bulbs, switch the thermostat down on the hot water boiler (you are unlikely to notice).

Bus Ticket 60Any way to reduce - by buying a season ticket maybe?

TV 13What is this for? Channels? If so, consider freeview/freesat?

Sky 24So what is this if TV is above? but as above, consider switching to an alternative provider (if cheaper) or cutting down, or cutting out. Often threatening to leave will give you a discount to stay (but not always), so if out of contract, consider this

Work Money 90What is this? Is it necessary? Can it be cut down or out?

Council Tax 117Is this over 10 or 12 months?

Misc 100What is this?

Credit Union 20What is this for? Does this mean that you have savings? If so, consider clearing highest charging debt with this. (But keep some as an emergency)

Unite 12.7

Total - 2014.7Pretty significant difference between this and income - you really need to find out where it is getting spent, and what on, and whether the budget needs amended, or the spending needs cut out - you won't know until a a spending diary reflecting current spending is done

Whatever is left over is always used up for other necessities (clothes, car, more food, nappies etc)Then the budget is inaccurate

We don't splash the cash and obviously dont have luxuries.so you need to find where it is getting spent

Do you think a loan from somewhere would be a good idea to pay off my debts? I would be paying back £160 pm for 3 years instead of around £190 per month just now which doesn't even make repayments!!Generally speaking, consolidation is not considered to be the most effective way to deal with debt as very frequently people do this, then continue their previous spending habits and run up the debt again, thus having the loan as well as all the other debt thus doubling the original debt. This, obviously, is not the case for everyone, so only really you can know if this is a good idea or not - but definitely sort out the spending and budget before making a decision
Or do you think there is another option I could explore?

Thanks for your help in advance

I think that there are some spends that are not listed above - clothes, haircuts, home insurance (contents), entertainment, etc, so really you need to find out what all these other things are costing you.

Comments above,

HTH

D9