In such a state... I don't know what to do.

Wongahangover

Over the past year I've racked up a lot of debt... Mostly with paydays loan.

My salary is £1,370 a month after tax. I am in the graduate job of my dreams and my salary is set to rise steeply. My next pay rise in April is set to be £4k pa. My following two will be £10k each in 2016 and 2017.

I live in London.

I've just had £800 wiped clear by wonga. I recognise I can't keep borrowing each month to pay off my loans. The interest has crippled me. Even without my payday loans, my other debt repayments are so high I can barely afford to live. I'm struggling to sleep at night and can't concentrate at work because I'm constantly adding up what I owe and thinking about where my next loan is going to have to come from.

Payday loans due to come out on pay day:

Wage day advance: £490
Mr lender: £390
Uncke buck: £269
Sunny: £380
Myjar: £130

Total: £1,559

Monthly repayments
Everyday loan: £140 a month until April
Lending stream: £75 a month until February
Spring coin: £84 a month for another 17 months
Barclaycard : £40 a month min on £1500 credit card
Capital one credit card: £30 a month min on £1000
Vanquis: £15 a month on £250
Natwest credit card: £11
natwest overdraft: £20 interest on £2000 overdraft
Very : £ 40 a month min on £80

Total~ £489 a month

Living expenses:
Rent £540
Bills; £60
Travel £140

I also owe my parents £4000. Which I feel so guilt about. I can't afford to pay them back at the moment, but need to start paying them back £200 a month next year.

I know where I've spent my money. I've been on holidays to Mexico, ibiza, spa breaks, gone out every weekend buying champagne etc. To the point where I had joined money and the interest charges have madenit all impossible. Now I don't go out at all. I wish I could turn back the clock.

I think that I have two options... Get a highninterest consolidate loan- I think this is the option I prefer. If I could borrow £3000 over 5 years I could clear my payday loans and also lending stream, everyday loan and springciin. That would leave me with a manageable monthly repayment each month. I really don't care if it means I'm paying 60% Apr. In a few years time I'll be earning enough that £150 a month won't even be a big deal.

The other alternative and one I don't really know much about is debt management, this one scares me and I'm also concerned as all of my debt is registered at my parents house and I don't want them to have to deal with phone calls etc. It's also my understanding that lots of the people I've borrowed from don't work with debt management companies.

I just want advice... Cause right now I feel completely stuck and ashamed. I can't keep living like this.

HappyMJ

Going on to a well managed DMP will stop any phone calls so don't worry about that.

I would not recommend refinancing onto a higher interest rate it'll just make the problem bigger.

Monkeyballs

Yup, in your current state I'm thinking DMP too!

Call Step Change, there is a calculator and more info on their website: http://www.stepchange.org/

These guys are excellent, in the space of a 6-8 weeks you can have something in place to allow you to live your life, pay your debts and sleep easy at night (yes, I'm aware it's 03.38 lol).

Never borrow your way out of debt, it's the biggest mistake you can make!

Do be aware of the damage this will do to your (your already trashed) credit file. But act fast too, you may be able to stop the next payments going out instead only providing token payments... Get an emergency fund in place ASAP

Good luck!

MB

mobo1980

hello wongahanover

Can you get a bank loan with a reasonable apr to consolidate your debts ?

I got a loan recently but must admit they've got a lot stricter when you apply now , I wouldn't personally have a dmp but it's whatevers best for you ( my mum had to get some of her debt wiped off after getting herself in a pickle)
Good luck with it all , try not to worry too much

Mobo xx

dancingfairy

A dmp looks like it is probably going to be the best option for you, after all borrowing to get rid of borrowing doesn't seem like a logical solution.
If you decide to go down this route you will need to get yourself a new bank account. Make sure it is a basic bank account (I think all banks offer these) as then you won't be offered an overdraft an it won't require a credit check. Make sure you make it clear in the bank that you want a basic bank account (no credit check).
Then get your salary transferred across and any important direct debits. DO not give your creditors your bank details. This will allow you to pay your essential bills (ie rent, food, heating etc) and be in control of what's left. Hopefully all your creditors will agree a repayment plan but if not, if they only have your old bank account then they can only rinse your old bank account but you will have your new one from which to pay rent etc and your old bank account will become just another creditor.
df

sourcrates

Just to add my thoughts, its rarely a good idea to get a consolidation loan, as the tendency, once the loan is in place, and the PDL`s paid off, is to thing Hmm just one more PDL just to buy this or that, then that turns into another one, and another, and before long, you are back to square one with twice the debt.


You mention future pay rises, fair enough, but you need to learn to live within your means first, otherwise this situation will become a lifestyle choice that will keep reoccurring throughout your life, its all to easy to become complacent where money and debt is concerned, in that respect, I doubt you have yet reached your "light bulb moment", the point at which you realise further borrowing is futile, I strongly suggest you look at some kind of debt management plan, step change offers excellent free advice, as does National debt line.

Monkeyballs

Also, you never know what the future is going to bring... You are banking on money which you don't yet have so as Sourcrates mentions above, you need to learn to live within your means.

A year ago I had a decent job earning £24k per year which allowed me to pay £500 pcm (sometimes more) off my debts with a DMP but then just before Christmas my back went and now I'm facing losing my job... I had been banking on becoming debt free by 40!

Still a chance for me but it's becoming slimmer every day...

MB

gfplux

If you are not concentrating on your job your graduate job of your dreams may disappear