Loans? Credit Union? How to get debt free

want_to_be_debt_free

Hi
New to this site. Trying to sort out finances. Public sector worker. Got low mortage - £50,000 on five year fix, good salary as work full time, but credit cards debts/overdraft for eg work done to house of £15,000 - of which just moved £5,500 to interest free cards for 2 yrs. Looking to take out personal loan for £10,000 over 5 yrs. Credit ref agencies OK - although owe money to utility company because of bungled uswitch move about a year ago - am paying them off by installments, but having problem getting credit except secured loan and don't want to agree to variable APR. SO what now? Could sell car £2500 but relative is disabled and relies on me for transport. Can approach credit union, but they have said wont lend much as I havent dealt with them much and they will do a credit check that may affect my score. Usually in my overdraft, so don't think bank/mortgage lender will lend, and if they check and say no, that wont be soft search so credit rating will be affected. Not insolvent, as can cover payments just about but making no headway in paying down because of amount I am paying for credit and going into overdraft. ANy ideas? Should I abandon five year fix just signed up to and look for complete mortgage as have sufficient equity?

fatbelly

want_to_be_debt_free wrote: »

Hi
New to this site. Trying to sort out finances. Public sector worker.

Got low mortage - £50,000 on five year fix, good salary as work full time, but credit cards debts/overdraft for eg work done to house of £15,000 - of which just moved £5,500 to interest free cards for 2 yrs.

Looking to take out personal loan for £10,000 over 5 yrs. Credit ref agencies OK - although owe money to utility company because of bungled uswitch move about a year ago - am paying them off by installments,

but having problem getting credit except secured loan and don't want to agree to variable APR.

SO what now? Could sell car £2500 but relative is disabled and relies on me for transport.

Can approach credit union, but they have said wont lend much as I havent dealt with them much and they will do a credit check that may affect my score.

Usually in my overdraft, so don't think bank/mortgage lender will lend, and if they check and say no, that wont be soft search so credit rating will be affected.

Not insolvent, as can cover payments just about but making no headway in paying down because of amount I am paying for credit and going into overdraft.

ANy ideas? Should I abandon five year fix just signed up to and look for complete mortgage as have sufficient equity?

So it's the 10k on interest-bearing credit cards that is worrying you. I wouldn't advise moving that to any form of secured borrowing, so leave the mortgage as it is and don't go for a second one.

I don't think a 2500 car is unreasonable, and IF you were able to meet the contractual minimum payments on your credit cards AND not find your overdraft increasing then your overall debt would be reducing, even if slowly.

The answers here may be in the fine detail. A lot of small changes could have a big effect.

Could you post a statement of affairs for us to rummage through. That is a link to a calculator. Please use the format for mse button.

want_to_be_debt_free

Thanks so much for taking time to reply. I have looked carefully at what you have said and all the options, and think you are right that I shouldn't take out a secured loan, as firms like Nemo Finance don't have a good reputation. In retrospect, not that pleased with Santander, as they would not deal with additional borrowing at same time as re mortgage but invited me to apply for additional borrowing, and have only now said this is not available for debt consolidation and so I am now fixed with them for five years, and so a general remortgage for lower rates not now financially viable.

However, time to face the music I suppose and would like to get this debt paid down over next 3-4 years anyway. Not sure how to do this with some of interest rates I am paying on cards. If I could maybe get small loan eg 2K from credit union that stopped me catapulting into overdraft each month, that would be a start and save me money. I can then also pay off utility company, which ultimately will improve my credit rating.

I hope you understand even anonymously, I don't want to go into too much detail about my financial info online, but when I consulted a government debt advice line, they said I was basically solvent just not able to clear debts very fast.

You said that it was making small changes that could make a difference. Can you give me some pointers there. I am working full time in quite a stable job, doing clear out at home this summer so can look out items to be sold. My council tax is in correct band, I often check for best utility bill prices etc. I can check things like if I can move for cheaper car insurance maybe.

Any tips really welcome.

Thanks for your time.