Debt problems, advice please?

Hello,

I am new to the forum so sorry if this is in the wrong place? or if I break any etiquette?

I am struggling with debts and want some good non-biased advice.

my situation is as follows...

Loan with £9500 outstanding repaying £243 per month
credit card £900 repaying 23 (minimum) per month
1500 overdraft which I am usually around £800 overdrawn paying around £13 interest per month

I work full time in a fairly low paid job as does my wife. childcare + rent + travel and we are empty.

My current plan is to take another loan at a better APR if possible pay off my current loan and credit card. and then continue with paying off the new loan hopefully at around £200 per month.

I checked on experian and there is 1 lender who it suggests can offer me loan at 4.7APR.

My question is does this sound like a reasonable plan?
or is getting a new loan ludicrous?

any/all advice greatly appreciated?

thanks

Comments

  • Refinancing isn't something to be considered lightly.

    I did it twice (to take advantage of lower monthly payments), and pretty much doubled the repayment period. :(

    I suggest posting a SOA (link at the bottom of this post), listing the debts with APRs and payments currently being made.

    That'll allow the good people of MSE, to give you the best possible advice.

    BTW. This should probably be on the DFW board, so if one of the Board Guides could please move it? :)

    http://www.stoozing.com/calculator/soa.php
  • Consolidation loans are not a good idea, I've done it twice and really regret it.

    Post an SOA so we can see where you can cut back your monthly costs, and you will get some great advice that will help you throw more money at your debts each month. I know I did!

    Also see about getting a 0% balance transfer credit card instead of a new loan.
    LBM moment Nov 2013
    Barclaycard 0% [STRIKE]£2,719.64[/STRIKE] £1,575.22 Virgin 0% [STRIKE]£3,224.00[/STRIKE] £2,533.08 MBNA 0% [STRIKE]£1,994.72[/STRIKE] £2,473.53Lloyds Card 0% [STRIKE]£1740[/STRIKE] £1,260 Loan 22.80% APR [STRIKE]£3,585.63[/STRIKE] GONE:j Invisalign 0% [STRIKE]£2,493.26[/STRIKE] GONE :jOriginal Total: [STRIKE]£13,120.17[/STRIKE] Now: £7,841.43
  • ecrow
    ecrow Posts: 5 Forumite
    Hello,

    Thanks for responding. below is my SOA.

    Update on my situation ...

    Looks like I cant get close to the representative APR with any lender so I have been accepted for a new loan from hsbc at the same APR (15.9)

    I am considering taking it for the following reasons:
    a) I can pay off my credit card
    = an extra £23 per month in my pocket
    a) a marginal reduction in my loan repayments
    =£7 per month extra in my pocket
    c) I have to move accommodation and need money for a deposit so the extra 1 - 2k would fund this

    The thought of clearing one of my debts (credit card) is very appealing.

    One other option is my wife could take a loan as she would almost certainly get a better rate than me. then we use her loan as above. however having these debts around my neck has been difficult and I would like to avoid ramming it down her thought and putting her through the same day to day distress I am in, unless the savings are too good to refuse.

    As I said any/all advice greatly appreciated?

    Thank you






    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 0

    Monthly Income Details

    Monthly income after tax................ 1100
    Partners monthly income after tax....... 1800
    Benefits................................ 23
    Other income............................ 0
    Total monthly income.................... 2923


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 1000
    Management charge (leasehold property).. 0
    Council tax............................. 100
    Electricity............................. 30
    Gas..................................... 20
    Oil..................................... 0
    Water rates............................. 10
    Telephone (land line)................... 0
    Mobile phone............................ 40
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 25
    Groceries etc. ......................... 250
    Clothing................................ 0
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 180
    Childcare/nursery....................... 520
    Other child related expenses............ 40
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 2215



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 0


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly...APR
    hsbc loan......................9476......243.......15.9
    hsbc credit card...............900.......23........9.9
    overdraft......................800.......13........0
    Total unsecured debts..........11176.....279.......-



    Monthly Budget Summary

    Total monthly income.................... 2,923
    Expenses (including HP & secured debts). 2,215
    Available for debt repayments........... 708
    Monthly UNsecured debt repayments....... 279
    Amount left after debt repayments....... 429


    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -11,176
    Net Assets.............................. -11,176
  • ecrow
    ecrow Posts: 5 Forumite
    Also, sorry about posting in the wrong place...

    I though I was in the DFW. Now I see im in a sub board.

    I will move it if possible? just tell me how?

    thanks again
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    First Anniversary First Post Debt-free and Proud!
    edited 31 January 2014 at 10:20PM
    ecrow wrote: »
    The thought of clearing one of my debts (credit card) is very appealing.

    If you do pay off the CC, then, FGS cancel it.
    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 0

    Monthly Income Details

    Monthly income after tax................ 1100
    Partners monthly income after tax....... 1800
    Benefits................................ 23
    Other income............................ 0
    Total monthly income.................... 2923


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 1000
    Management charge (leasehold property).. 0
    Council tax............................. 100 - If this is over 10 months, going to 12 months will reduce it to £83-33.
    Electricity............................. 30
    Gas..................................... 20
    Oil..................................... 0
    Water rates............................. 10
    Telephone (land line)................... 0
    Mobile phone............................ 40 - How many phones?
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 25
    Groceries etc. ......................... 250 - Try to get this down by at least £50.
    Clothing................................ 0 - Never?
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 180
    Childcare/nursery....................... 520
    Other child related expenses............ 40
    Medical (prescriptions, dentist etc).... 0 - Never?
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0 - You need this. Costs about £10.
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0 - You need something in here.

    Total monthly expenses.................. 2215



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 0


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly...APR
    hsbc loan......................9476......243.......15.9
    hsbc credit card...............900.......23........9.9
    overdraft......................800.......13........0
    Total unsecured debts..........11176.....279.......-



    Monthly Budget Summary

    Total monthly income.................... 2,923
    Expenses (including HP & secured debts). 2,215
    Available for debt repayments........... 708
    Monthly UNsecured debt repayments....... 279
    Amount left after debt repayments....... 429


    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -11,176
    Net Assets.............................. -11,176

    If you really do have £429 left each month, I'd suggest using some of it to help clear the Credit Card.

    If you increased the monthly payments to £100, it would be cleared in 10 months, and cost just £30 in interest, compared to the current 47 months and £182 in interest.

    £400pm would have it gone in just over 2 months, and a fiver interest.
  • ecrow
    ecrow Posts: 5 Forumite
    Why cancel the CC For 10 years I had it practically unused as my emergency money. I only maxed it when I had a year with no work. once cleared my plan would be to keep it for emergencies.

    If you really do have £429 left each month, I'd suggest using some of it to help clear the Credit Card.

    I dont have £429 a month. I have obviously missed something on the soa ... I will do another now and be more accurate,
  • ecrow
    ecrow Posts: 5 Forumite
    Here is a more accurate soa.
    its 2 phones £15 and £18 per month
    we spend almost nothing on clothes - have enough and tend to only but when they wear out.
    we actually pay more for childcare and travel than I previously stated.
    medical costs i forgot to add my wifes contact lenses fee

    I am missing something as we dont have £70 -£80 left in out pocket at the end of the month.



    Monthly Income Details[/b]
    Monthly income after tax................ 1100
    Partners monthly income after tax....... 1800
    Benefits................................ 81
    Other income............................ 0
    Total monthly income.................... 2981


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 1000
    Management charge (leasehold property).. 0
    Council tax............................. 160
    Electricity............................. 30
    Gas..................................... 20
    Oil..................................... 0
    Water rates............................. 21
    Telephone (land line)................... 0
    Mobile phone............................ 32
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 22.5
    Groceries etc. ......................... 250
    Clothing................................ 20
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 280
    Childcare/nursery....................... 720
    Other child related expenses............ 51
    Medical (prescriptions, dentist etc).... 13
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 6
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 2625.5



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 0


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly...APR
    loan...........................9476......243.......0
    credit card....................900.......23........0
    overdraft......................800.......13........0
    Total unsecured debts..........11176.....279.......-



    Monthly Budget Summary

    Total monthly income.................... 2,981
    Expenses (including HP & secured debts). 2,625.5
    Available for debt repayments........... 355.5
    Monthly UNsecured debt repayments....... 279
    Amount left after debt repayments....... 76.5


    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -11,176
    Net Assets.............................. -11,176
  • Most of my previous comments still apply, and more so regarding the Council Tax.

    If it is being paid over 10 months, then swapping to 12 months will reduce it to £133-33.
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