Debt free in 10 years, advice required.

hans_morretti

Due to circumstances I've managed to get into quite a bit of debt, had to pay for 2 operations privately, and went for 5 months with no wages other than statutory sick pay!

My situation is that I have a £20,000 loan over 10 years, I'm 1 year into that, and approximately £17,000 on three credit cards. It's my ambition to rid myself of this debt in the next 10 years.

Our mortgage is for £102,000 and our house is now worth around £130,000. Would I be better incorporating the credit card debt into the mortgage, or trying to pay it off without doing that? My concern is the amount of interest I'm paying on the cc debt.

I'm fortunate to have a well paid job, bringing home around £2000 - £2600 a month.

I realise that by incorporating the money in with the mortgage would mean that it wouldn't be clear in the 10 year period, but it would be managed and I would know what I'm paying from month to month.

Any advice would be gratefully accepted.

Primrose

I guess it depends on what interest rate you're paying on your mortgage and what interest rate you're paying on your loan and credit cards and whether there's a penalty for paying off your loan early. If I were in your position I'd try and paying the highest interest rate debts off first. There's no penalty for paying off the credit cards more quickly if you're able to. Apart from anything else, it will probably concentrate your mind to focus on clearing the credit card & loan debts. If they're part of your mortgage it might be easier to lose the incentive to try and reduce them. While they're hanging round your neck separately it won't be so easy to do so.

Jacks_xxx

:wave: Hiya sweetie!

Don't even get me started me on having to pay out thousands for vital operations because the NHS is poo. My dad's new hips cost a blimmin' fortune! :rolleyes:

What's the chances of getting a 0% Credit Card (or two!) and balance transfer-ing all the credit card debt over?

Definitely punch all of your debt details into the Snowball calculator and see what it comes up with, and read what he has to say about consolidation. (Then try it with the CCs at 0%. You'll go crazy when you see how much faster it vanishes!)

http://www.whatsthecost.com/snowball.aspx

It's a good idea to post up a full SOA to see if we can help you get a better deal on something, or cutback somewhere, or re-structure something so that it will work better for you.

Info on how to do this can be found here:

http://forums.moneysavingexpert.com/showthread.html?t=107280

Is the £20, 000 loan already secured on the house? (If it is, you might find re-mortgaging or getting another secured loan a problem in the current climate.)

That's all I've got for now hon, but with a bit more info we'll be able to be more useful.

You're in good company here.

Love Jacks xxx