I Want To Be Debt Free!!

Merchantj

Hi Guys,

It's got to that point where i want to be debt free. I no longer want credit cards, loans, hire purchase etc etc. I am finding it all a pain to deal with and id rather just start afresh from a clean slate, save, and try and survive without finance.

I have the following debts outstanding at the moment.

Creation Consumer Finance - £5091.00 @ 152 PM ~ 9% APR
Creation Consumer Finance - £900.00 @ 50 PM (BNPL till 05/2014) ~30% APR
Hitachi Consumer Finance - £1198.00 @ 52 PM 0% APR
Capital One - £1998.00 - @ 70 PM 34.9% APR
Barclaycard - £1990.00 - @ 50 PM 34.9% APR
Littlewoods Home Shopping - £407.78 @ 31.72 PM (BNPL Till 01/2014) ~ 30% APR
Three Mobile - £222.22 @ 37 PM (Just a contract i want to leave)

Total Debt £11807 @ £442.72 PM

My credit rating seems OK.
My current credit ratings are as follows.
Experian - 871
Callcredit - 807
Equifax - 807

I have never missed a payment on any of my open accounts.
I have 10 closed accounts all paid and upto date with no missed payments. I am on the electoral role for my address and can be traced via the roll for the last 5 years.

I need some advice on how to clear this in the quickest and cheapest way. Initially i thought debt consolidation loan, get a lower rate, clear everything and then one payment to make everything nice and simple. However no one is willing to provide me with one. ( Even my own bank)

So then i keep seeing all these adverts for IVA's or Debt relief orders and they sound very tempting, but i dont want to do anything that is going to scar my credit rating in anyway. ( I plan on getting a mortgage someday.)

Income Vs Expenditure.

Income £1765 PM Net.

I am in a fortunate position where my employer pays for all my rent and half my bills and food/clothing etc. I pay 50% towards bills, food, clothing, etc. I drive company car, insurance, fuel, maintainance, etc paid for by employer. So my monthly expenditure looks something like this.

TV Licence - £6.60
Council Tax - £55.00
Electric & Gas - £30
Water - £15
Broadband - £15.50
Food Budget £150.00
Current Account Facilities £15.00
Mobile Phone - £32.00
Gardner £10
Pet Insurance - £18.34
Credit Referencing - £22.98

Total - £370.42 + £442.72 (Debts) =£813.14
£1765.00 - £813.14 = £951.86 Expendable Income.

So i ask you guys what is the best way of tackling this based on my actual circumstances. I know banks will not give me a loan to consolidate because they dont know i am actually going to clear my debt with the loan. So i just need some help getting my head around this. Hearing from anyone that has had similar circumstances etc.

I wouldn't say i am struggling i just hate seeing my money being absorbed by high interest charges and whilst i have outstanding finance there is no point saving as the interest from savings will be much lower than interest on finance.

Any help will be appreciated.

James.

R_P_W

Cut your bank charge, gardener and credit referencing and there is another fifty quid a month

sunshineangel

have you tired doing a snowball calculator? personally id through as much as poss at higher interest debts while maintaining payments as written to others.
hope this helps. Good luck :-)

mum2one

Creation Consumer Finance - £5091.00 @ 152 PM ~ 9% APR - good apr on that - is that fixed for the term of the purchase
Creation Consumer Finance - £900.00 @ 50 PM (BNPL till 05/2014) ~30% APR
Assuming Oct to Apr @ £50 pm 8 mths - £400 off debt - leave £500

Hitachi Consumer Finance - £1198.00 @ 52 PM 0% APR - How long is the )% for
Capital One - £1998.00 - @ 70 PM 34.9% APR
Barclaycard - £1990.00 - @ 50 PM 34.9% APR
Littlewoods Home Shopping - £407.78 @ 31.72 PM (BNPL Till 01/2014) ~ 30% APr -again Oct, nov, dec - £95 off debt
Three Mobile - £222.22 @ 37 PM (Just a contract i want to leave) thats got no apr charge - in your total have you allowed the months notice?



Total Debt £11807 @ £442.72 PM

If you could afford to put £300 a month extra off your debts, any more would be brilliant, working on that.


(above your base payments)

Oct - £300 - Barclaycard (although capital one same apr - the repayment lower on barclaycard)

Nov - £300 - barclaycard

Dec - £300 I would pay this off Littlewoods as the apr starts in Jan, and with the payments made from Oct, Nov, Dec, - you may only need to put £15 or so extra - that be one debt finished.

Jan - now freed up £31.72 (round it up to £32) - now have £332 this month - add this to barclaycard

Feb onwards as well as £50 to Bcard - add on the £332

March - if you pay your council tax over 10 months then March and April will be free months - that will give another £55 for the debts
£300 (extra money) + £32 (was littlewoods) + £55 (council tax) + £50 (standard bcard payment) - £437 off bcard

April - No council tax - ditto as march - £437 off Barclaycard

May - council tax back .... go back to £300 over payment, + £32 littlewoods) = £332 + £50 Barclaycard = £372

When you have Barclaycard cleared -

-I would hit Capital One next - same principle - snowball all extra payments to Cap 1. Soon come tumbling down

Its not worth paying your phone contract off any earlier as that is the equivalent of 0%

By now you should be left with the bigger creation finance and the hitachi, - I would see then if you can make overpayments - great pick one with the highest apr and amount owed and hit that, - if there is no overpayment allowed, then put the money you would have paid on top into a saving account and when you have enough to settle in full you can do that.

xx

dave8204

Check your loans to see if they have penalties for early repayment.Same thing with your phone contract and the BNPL debt.
If so I'd bite the bullet and given your expendable income clear the credit card debts in 4 months.I'd the approach the others about early repayment and weigh up any penalties against potential savings and take it from there.Just clearing those cards is a great start but I'd keep one as a fallback in case of emergencies,I pay my motorbike insurance with mine and my Amazon purchases,paying off both in full,to keep it "live".
Do you really need the "advantages" of a paid for current account? Some are very useful,others worthless depending on what's on offer and how relevant to your lifestyle.Likewise the credit referencing,unless you need that kind of service for your work or whatever is it really worthwhile?
As you say you're not struggling,I got myself debt free from pretty dire circumstances and from the information you've given you shouldn't have much problem.
One thing,you mention saving,no savings vehicle will give you the kind of returns that match the interest payments on your debts so clear those first before you save.Upset a relative of mine a few times as every time he's asked me the best place to invest his money I've told him,"clear your credit card debts",not paying over 30% APR is the best saving you'll make anywhere right now.

mum2one

http://www.whatsthecost.com/snowball.aspx

thats the link to the snowball calculator x

I just popped your base figures in, and on the repayments at the mo our be debt free in 35 months, if you added £300 per month, then you'd be debt free in 17 months.

Added £400 extra to your base fig of £472 then you would be debt free in 15 months........

If you did the £300 thats yr and a half - your keep your good credit rating, just dont go spending on the cards unless you pay that month,

Merchantj

R_P_W wrote: »

Cut your bank charge, gardener and credit referencing and there is another fifty quid a month

The bank charge covers my worldwide travel insurance for my partner and I, my mac and IPhone insurance. RAC breakdown for my partner, my will, as well as my extended warrenties on a few houshold items. ( i dont think i could get all that for less than £15 a month or scrap it all together)

My tenancy says i have to keep the garden neat and tidy, i didnt and my landlord had a go at me. for £10 a month i think its a good deal. If i get rid of the £10 a month then i will have to fork out money for garden equipment.

Credit referencing i guess i could scrap. I do like to see my credit rating but i guess i could just sign up again as and when i need to.

Thanks for all your help so far guys, this snowball method seems to be the best option.

as long as i can get some structure to this then i cant see why i cant get debt free within 12 months.