Should I consider a loan to cut interest costs

japmis

SeduLOUs wrote: »

With regard to budgeting and keeping a closer eye on where you are spending I would recommend YNAB. It costs £30 but to me is worth it's weight in gold - you can do a free trial for 30 days and see what you think. There are some advice threads about it on here and many people swear by it.

If you would like some advice and help on general areas to cut back, please fill in an SOA - http://www.stoozing.com/calculator/soa.php

What Sedulous said!! And cut up those cards ASAP :beer:

rockm87

as said!

Don't replace one debt with another. Don't worry about your credit score, it means nothing unless you are trying to borrow more money. It's a measure of your relationship with debt, not your wealth (dave ramsey quote)

just work out why you're overspending and having to result to credit cards and store cards, and just get yourself hammering that debt!!

ava77

Thank you to everyone who has replied to this post. It really has helped a lot. Over the last week I have been really stressing about it all, not sleeping, eating & just constantly worrying about it all. Trying to juggle everything has just been a nightmare.
Before Christmas 2014, I contacted step change. They where lovely over the phone, but by the end of the conversation I was in tears. I was basically told that I couldn't afford my debts and once I received the paperwork through the post I was to send them a copy of our budget, and offer each of them £1 pcm until we where in a better position.
Thankfully my husband was given a pay rise and we've muddled on. Not missing any payments, and always paying over, even if only slightly over the interest rate.
My reasoning behind wanting a 15k loan was to get everything in order, finances/house extra. So while we were paying the loan off, we wouldn't have to rely on credit if the washer broke, or one of the many other things you forget to plan for.
Don't worry though, I've been on the snowballing thingy and have a new plan of action for the next few months.
As I cover the cost of interest rates weekly the monthly payments all go towards reducing the bill.
First will be paying
£500 Vanquis
£50 next
£50 capital one
I've managed to save £50 pm by cancelling both my hubbies and my mobile phones. I never use mine, and hubby has a works phone so they where surplus to requirements.
That's the plan for May/June's payday.
After that the snowballing thingy said to focus on capital one. With this I do not agree. I want to pay the Argos card first as the things I bought where on the buy now pay later, if they're not paid before the time runs out they put on the interest from when you first got the item. So obviously that has to be paid first or I'll be paying more interest than capital one.
I'm actually feeling quite positive about everything today. Thanks to you guys.
Anyways, if there is something I've missed, or anymore advice. It is very appreciated

SeduLOUs

ava77 wrote: »

After that the snowballing thingy said to focus on capital one. With this I do not agree. I want to pay the Argos card first as the things I bought where on the buy now pay later, if they're not paid before the time runs out they put on the interest from when you first got the item. So obviously that has to be paid first or I'll be paying more interest than capital one.

Completely agree with this. Argos next to avoid the chunk of interest, then APR high to low. The calculators just aren't brilliantly equipped to deal with these sorts of scenarios so a bit of common sense does need to be applied.

You can do this!

ava77

Oh and I can't chop the cards up yet, I have to put in the long card number every time I ring to pay the bill. I am hopeless at remembering them. But they I never kept in my purse or hubbies wallet to temp us. And will be disposed of and canceled once the debt is paid.
I am keeping the Argos card though. I think that ones great for interest free periods. And makes buying bigger more expensive items easier to afford. Just need to not have so much going out at once in the future.

SeduLOUs

ava77 wrote: »

I am keeping the Argos card though. I think that ones great for interest free periods. And makes buying bigger more expensive items easier to afford. Just need to not have so much going out at once in the future.

I agree with the sentiment of taking advantage of interest free periods, but only if the price is decent. Catalogue companies tend to charge higher amounts, so often it is better to buy from elsewhere using a 0% purchase card, and in the longer run (once the debt is cleared) it is even better to have an fund saved up to pay for these things outright.

Saving whilst paying debt is not normally a good thing, as it costs you money, but having no emergency funds at all is also quite risky. On that basis, it might be worthwhile considering keeping one of the higher limit cards open only for absolutely genuine emergencies. If there is any risk at all of being tempted to put more general spending on there, then you do need to close them.

ava77

SeduLOUs wrote: »

Completely agree with this. Argos next to avoid the chunk of interest, then APR high to low. The calculators just aren't brilliantly equipped to deal with these sorts of scenarios so a bit of common sense does need to be applied.

You can do this!

Thank you for responding, I was worried about the Argos debt. You've put my mind at ease

ava77

I think once the cards are paid, they both need to go. Hopefully we'll be in a better position to get an emergency card with better rates, just for emergencies until I can start to save for such things.

chevalier

I would still fill in the SOA even for your own information. It give you a focus on where you might be able to save a bit. Also have a look at insurances and utilities, you may be able to make savings there. And if you go via a cashback site like quidco or topcashback, you might get money back on the deal.
good luck
chev

ava77

Hi, I'm not up with all the lingo here. I'm embarrassed to say that I have no idea what "SOA" stands for.
I am on the list for energy saving emails, and switch to the best deal when possible. Plus the budget calculator has helped loads with insurance, mobiles etc. if only I could get away with living on fresh air, I'd save a bundle, although I think this is what a conservative government want for all us struggling to get by (sad face)