Finance Advice required

Ray:

Hi,

I've managed to accumulate a few debts. Most recently fell in to the dreaded short loan fiasco. Started with £100, and the following month increased and then on... until borrowing from Wonga increased to £750. So in total I owe Wonga £990 (give or take). And long story short, ended up with DFH (Debt Financial Solutions) who said they'll help me with this situation.

They'd asked what else I have or owe. I said being a graduate, I have a student/graduate overdraft at £2000 (which is interest free, for now) and they insisted that I pay that back now too. So I'm in a payment plan (a couple of months in now) to payback the Wonga loan and the overdraft. Obviously DFH don't do this for free, they charge 30£ a month for their services. After speaking to my dad who highly recommends this site, said they are better solutions i.e. take a credit card and slowly pay that back etc? I wanted to ask for your advice and any possible solutions that may help me. Appreciate all and any help you can provide.

Regards,

ilovelondontown

Your father is right, there are A LOT of better options than going with a fee paying service.

Step change are one of the best people to go with and they don't charge. Even if you have a conversation with them about your current finances, they can advise the best way forward: http://www.stepchange.org/

Don't pay someone to sort out your debts when there is help out there for free that can help get you debt free and quicker.

best of luck!

Ray:

Thanks, I've sent Step Change a message, and I'll await to hear on their advice.
My father also said to use a 'balance credit card' so put it all on a credit card and slowly pay that off?! He said that's what Martin Lewis said?

sourcrates

You don't really want to be taking out more credit, get some advice from one of the free debt charities if you wish, but with only two creditors this is something you can do yourself without involving any third party, there's nothing this "debt financial solutions" can do that you cant do your self, instead of paying those guys £30 a month, just send the payments to the creditors yourself, simple really, id cancel this agreement you have with them straight away and pay your creditors directly yourself, why would you pay someone £30 a month to do something this simple ? your just throwing money away unfortunately !!!:cool:

If you want some more detailed advice on this please feel free to inbox me with any questions.

Ray:

Thanks Sourcrates,

But what this DFH said is that they've got good relations with Wonga and will freeze the account so nothing additional. Surely I can't do that? But any way of saving money-please advise. thanks.

Grumpelstiltskin

Ray How clear can we make it DO NOT TOUCH ANY FEE CHARGING COMPANY WITH A BARGEPOLE.

The person you have spoken to is probably on commission, they will tell you anything you want to hear.

Miss_Marple_2

It's unlikely that you will get any decent CC deals if you are already in a debt management plan. Plus, creditors in the debt management plan do not allow you to take on further credit ( even if that further credit is to pay existing credit).

As per the other advice, now that the debt management plan is in place, it's easy to take on paying the creditors yourself. If you need assistance, the National Debtline website give lots of help and template letters, or contact Step Change or Payplan who will help with you DMP for free - that's an additional £30 off your debt each month - this will make a big difference to the time it takes you to pay off your debt.

Ray:

So is the advice (just so I'm clear) to contact Wonga themselves and come up with a monthly instalment plan? that I can pay it all back?! If so I shall do that.

I did the online Step Change questionnaire, and their answer is for me to sell my car?! So that's not feasible as I use it to... get around, especially to work. So their advice is not favourable. I haven't heard of Payplan or National Debtline-so will try them next.

Irregardless of 'decent' Credit Card ratings, would I not be able to get one to do as my dad said and put all the debt on that and clear it in one go?

Thanks again, for your response and advice-much appreciated.

[Deleted User]

Yeah cause you have to have so much debt to be able to have a DMP through a charity, totally know how you feel OP for those bashing you, I was turned away by a DMP charity for total debt just shy of 2,000 when at the time it was you had to have around £5,000 to even qualify for a plan and scared silly I might add, never mind only £990 is it... "How many times do people have to be told not everyone gets charity help"

Agree with everyone else though that there is nothing you cannot do yourself - go talk to the lenders and save yourself 3rd party grief

Weird_Nev

You need to manage this situation yourself so that you know how to avoid it in future.

1) Keep a spending diary and go though your bank statements so you know what you spend.
2) post a statement of affiars up here, so people can offer advice where you can make savings.
3) Cancel the debt management plan with the vampire company who take £30 a month to do nothing yo ucan't do yourself.

Basically, you need to reduce your costs sso that income exceeds outgoings, then throw money at the wonga loan as fast as possible to get rid of it. Speak to them yourself and you can persuade them to zero the interest, to stop the loan growing as you chip away at it.

After than you can address the student overdraft.

If you can get a zero percent credit card and pay the wonga loan off with it, that could be a solution, but speak to wonga first and see if you can get them to drop the interest. If you do get a credit card, pay the wonga loan off with it and then CUT IT UP.

Ray:

Hi thanks to you all! I spoke to Payplan yesterday and they said they can't really help as the debt is less than £5,000. So they said I should just contact wonga and do it directly. So I will do that. (As what you all have said)

With the "vampires" that are charging to do the service, what do I do with them? Simply cancel my direct payments to them via my bank or do I ring them up and tell them that I'm cancelling their use of services? Please advise. thanks.

And should the route be... pay the Wonga loan back and the tackle the overdraft? or do both at a smaller amount each month?! Please advise on that too! thanks.