sorting myself out

Dave90

Hi all . Looking for some advice.

I am on a mission to get myself debt free as my wage is utter rubbish and I just hate owing money out.

I can't decide on which debt to start overpaying on first.

As stated my rubbish wage is roughly £850 a month

Debts are as follows

Hire Purchase £10903 remaining / £176.76 a month 60 months left ( New Car)

Loan #1 £1718.55 remaining / £35.99pm 45 Months left
(missold old car negative equity top up loan from a year and a half ago)

Loan #2 £703.83 remaining / £144.52pm 6 months left
(have been making small overpayments on this)

Credit card £707.88/£800 limit / Min payment is roughly £15pm and is interest free until october 2015.

other outgoings

£100pm diggs
£6.90pm mobile
£70-100pm for Diesel

any advice on which to focus on first? thanks

twiggy86

Hi Dave


I'm a newbie at this too so I can't offer too much advice but I would advise using the "snowball" - I can't post the link but go to one of the sticky threads and in one of the topics off there on advice for newbies its got the link.
You enter details of all your debts and the interest rates and it works out the best way to pay all of them off whilst paying the least interest (apparently anyway). I would definitely suggest taking a look.
Hope that helps as a starting point

TBeckett100

Loan number 2 - get rid asap if you can.

Use the money saved to overpay Loan 1 within 12 months say

This frees up £180pm to tackle CC debt and maybe start saving.

Debt is fine provided you have savings to cover for when you cant make the payments.

Dave90

Thanks for the very quick reply folks.

Had a quick wee look at the snowball thing . quite a useful tool. Will keep a little bookmark on that for future use.

Loan #1 was initially my first thoughts to pay off, Just wanted more opinions.

I dont mind living off hardly anything . Aslong as I am still sociable lol and it really helps that my girlfriend loves saving to doesn't want to go out every weekend

bargainbetty

Is there any way you can sell the car that is taking up a quarter of your income and take approx 100% of your debt to salary ratio on it's own?

You haven't allowed for insurance.

Dave90

bargainbetty wrote: »

Is there any way you can sell the car that is taking up a quarter of your income and take approx 100% of your debt to salary ratio on it's own?

You haven't allowed for insurance.

Thing is I just bought the car , 2 months ago and the first payment is on monday. If I were to sell it just now I'd be out of pocket by a lot

Also it is on Hire Purchase which I hate as i'd prefer a personal loan meaning I would be able to sell whenever.

I also kind of need a car as Ive been told I need a hip replacement (Im only 24) lol so the less walking I do the better.

The car Insurance Ive just paid in full for the year. using the Credit card.


Was thinking about bank accounts also. I recently opened a 2nd bank account with RBS to transfer money from my nationwide to keep my bills seperate. Am I able to switch my nationwide to a diff bank to get £100 switching offer? and use this £100 to put towards loan #2 ?

jaydeeuk1

Any chance of a different job? In effect because of petrol and car finance, with 5 years left you're job is paying you £573.24 a month, and that isn't including wear and tear items like tyres, break pads and future MOTs. At 37.5 hours a week, your wage is realistically £3.80 an hour at best

Dave90

yea im only on a 30 hr contract , work in a rubbish supermarket with some overtime. get just under £7 an hr.

Been looking at new jobs however due to a visit to Australia in december to see family for 4 weeks it would be best to look for a new job in January.

Willowpop

Dave90 wrote: »

I also kind of need a car as Ive been told I need a hip replacement (Im only 24) lol so the less walking I do the better.

The other guys can probably help you financially better than I can, but I had my hip done in my early 30's and it's been fab! Get that op done, you won't regret it.

SavingPennies_2

I'd pay off whichever has the highest interest rate, loan 1, loan 2 or CC. Also see if you can transfer the CC to an interest free card (then cut up the old one). I know paying the insurance upfront is cheaper, but not if you are then paying interest because you put it on a CC (assuming its not interest free).

Dave90

SavingPennies wrote: »

I'd pay off whichever has the highest interest rate, loan 1, loan 2 or CC. Also see if you can transfer the CC to an interest free card (then cut up the old one). I know paying the insurance upfront is cheaper, but not if you are then paying interest because you put it on a CC (assuming its not interest free).

Hi savingpennies.

The CC is interest free till october 2015, thats why I paid my car insurance with it.