Debt Advice!

kkl789

Hi!

I'm 24 and have quite a lot of debt and I was after some tips to help reduce my monthly payments and overall debt. I would really like to apply for a mortgage within the next 3 years so reducing my debt is really important. I've added in a breakdown of what I owe and my monthly in comings and outgoings.

Debt
Loan 1= 7500
Loan 2 = 6789
Store Card = 300
Credit Card = 1400
Credit Card =1400
Credit Card 360
Store Card = 50
Overdraft = 3000

I've also got 3 credit cards that are empty which I don't use but keep at home for emergencies.

Every month I get paid £1500 and my outgoings are as follows:
Rent = 400
Bills= 50
Phone Bill = 50
Phone insurance = 6
Life Insurance = 13
Music = 10
Charity = 15
Transport to work = 310
Loan Repayments = 367 combined
Credit Card Repayments = 80 combined
Overdraft Interest = 45

This leaves me with 154 per month as leisure money - I've tried where possible to cancel all subscriptions to gym/cinema/unnecessary outgoings but I really want to reduce my outgoings a bit quicker but i'm struggling to cut back any more. Is a consolidation loan the right move? I'm extremely reluctant to enter into a debt management plan as this will effect my ability to get a mortgage.

I would really appreciate any help, advice or tips that have worked for you.

Thanks

marliepanda

You're current take home salary is £18000, Your rent is close to £5000, and your travel is close to £4000. Thats half your wages gone before anything else.

You're current debt is over £20,000 Over your entire salary. If ONLY paying rent and travel it would take you two years to clear. Obviously thats not realistic

I feel a mortgage within 3 years is unlikely, as you will probably struggle to pay off the debt in 3 years, never mind save a deposit. Maybe this is harsh but it is best to be realistic. With a debt over you current take home pay I think a DMP would be best, as you may get reduced figures to settle, and possible stop charges and interest.

The defaults will 'drop off' after 6 years, and to be honest I think that would be much more realistic for getting a mortgage than 3 years. Mathematically it seems impossible

redpete

If the £50 phone bill is a mobile phone then this is expensive, especially with the £6 insurance. Downgrade the contract and/or handset.

Cut out £10 a month spend on music (which is of course 'leisure').

What are the interest rates on the debts? Start by putting any spare money against the highest and when that's gone move on to the next. ("snowballing").

What's included in "bills"? Where is the spend on food and clothes?

Cut up and close two of the empty CCs - one should be sufficient for emergencies and you won't be tempted to use the other two.

ellesbellesxxx

I know it is wonderful to give to charity but cancelling that for the time being would save 180 a year. You can always shop at charity shops then reinstate when debt free x

[Deleted User]

We don't have enough info (eg. APRs and current payments) to give specific advice.

I suggest you post a SOA.

Butti

ellesbellesxxx wrote: »

I know it is wonderful to give to charity but cancelling that for the time being would save 180 a year. You can always shop at charity shops then reinstate when debt free x

I agree. You have to be charitable to yourself at the moment.