What to do

peterjames1990

I am 24 and have found myself in a serious hole i have 3 debts and big ones
1. 14000 with 11.1% interest over 5 years
2. 9600 remaining 9.9% interest over another 2.5 years
3. 3600 Remaining 6.8% over 2 more years

this is adding up to nearly 748 pound a month and i feel as though i am getting nowhere with paying it off / all i do is pay debts and work i work hard full time and earn 1500 per month i have 6000 left in the bank and have wasted all the rest on stupid bad habbits in my past now my credit score is ''good'' 440 on equlifax what would i be best doing to sort this horrendous mess out and start my life from fresh?

Caz3121

start with the debt free board here http://forums.moneysavingexpert.com/forumdisplay.php?f=76
As your current debt appears higher than your annual salary it is unlikely that you would be able to borrow your way our of this so you will get some good advice on that board
What interest rate are you earning on your savings? I assume it is less than the interest you are paying on the debt

PeacefulWaters

Your income exceeds your essential outgoings. Your interest rates aren't ridiculously high. It will be difficult to refinance.

The key now is to address the spend more than you earn habit. Do that and you win.

You'll be debt free in five years - sooner if you allocate payments from the shorter loans to the longest one when they've ended.

i have 6000 left in the bank

Could you make a part repayment against the biggest loan? Reduce that debt, carry on paying all the contractual payments and be debt free within three years.

Pixie5740

The £6,000 you have in the bank, is it earning more than 6.8% (doubtful). Whilst it's good to have an emergency fund (say £1,000) the other £5,000 could be used for debt repayment.

The Debt Free Wannabe board is full of people either in your situation or who have been in your situation so you'll find lots of help there.

If you're struggling with debt repayments it might be worth contacting one of the debt charities such as Step Change or CAP.

Foxy-Stoat_3

What are the monthly payments on these loans?

You could clear loan 3. and sink the rest into loan 1. and make over payments by the loan 3. amount into loan 1.

Unless you are struggling to pay the bills each month.

lee111s

It's possible the OP meant to write they have £600 left in the bank after paying their debts each month?

Foxy-Stoat_3

lee111s wrote: »

It's possible the OP meant to write they have £600 left in the bank after paying their debts each month?

Could be...I read it that he had wasted £8,000 out of the £14,000 loan and only has £6,000 left.....

Perhaps the OP will come back to clarify.

peterjames1990

Foxy-Stoat wrote: »

What are the monthly payments on these loans?

You could clear loan 3. and sink the rest into loan 1. and make over payments by the loan 3. amount into loan 1.

Unless you are struggling to pay the bills each month.

monthly payments are 1. 320 2. 249 3. 164

peterjames1990

Foxy-Stoat wrote: »

Could be...I read it that he had wasted £8,000 out of the £14,000 loan and only has £6,000 left.....

Perhaps the OP will come back to clarify.

hi yes wasted the 8000 basically just left with 6 and all the debt

peterjames1990

peterjames1990 wrote: »

hi yes wasted the 8000 basically just left with 6 and all the debt

*6000 do you think it would be best to clear the small amount and then work on paying off the bigger ones to spare abit of cash each month?

music_matters

Hey,


Good start in signing up to this board. I used to view this daily and never posted. But it did help me out of a very similar situation....except my bank balance was £0.


Get over to debt free wannabe and start chipping away at the debts. £6k in the bank would be better for your mental health being used to pay off what you can now! Cut down what you can monthly on outgoings and when the overall balance starts dropping everything else in your life will start looking much better.


Best of Luck!