Bringing down debt level

Wily_coyote

Hi all,
I have just joined this community and I am glad i did so ad i found reading posts very helpful with lots of good advices.
So here i am and i would greatly appreciate advice on my personal circumstance.
Due to some unfortunate circumstances recently i had to take a loan from Tesco of £35K last year. Monthly commitment is just shy of £600. I noticed that with all the expenditure during the month ( i have a family) this has becoming a big burden for me.
I have been trying to cut down to bear minimum every other life frill but the sum towards paying that loan is quite substantial nevertheless.
I was reading here that one option ( possibly in the short to medium term) is to get a credit card with a 0% deal money transfer for 2/3 years (MBNA looked good actually) and use the transfer facitly to partly pay the tesco loan which in turn will reduce the monthly payment. Is it something that others have done and if so is it a good option?
My main concern is that i want to repay all the debts of course i have but i need to have enough disposable income to go through the month.
I would really value responses to my question and read similar experiences. Any other alternative is also appreciate so does not involve securing my house or touching my mortgage.
Thanks

ReadingTim

The money transfer option will only work if you will be able to repay the entire balance before the interest free period ends. Otherwise you'll pay interest on the outstanding amount, which will be at a higher rate than the loan. You'll also need to check the terms and conditions of your loan to see if it allows overpayments, and also that overpayments can be used to reduce the monthly repayment, rather than the term of the loan. However, from experience of making overpayments on my mortgage, overpayments reduce the monthly repayment less than you think.

Given you won't get a credit card to repay the entire loan, I personally think your plan is too convoluted and offers too little gain. You'd be better off sticking to the more traditional methods of getting out of debt, ie:

• spending less
• earning more

Post an SOA, and I'm sure people can offer suggestions on how to achieve the first aim - you might want to think about the 2nd, ie getting a second part time job, or a better paying main job.

National_Debtline

Hi Wily Coyote and welcome to MSE,

Wily_coyote wrote: »

i had to take a loan from Tesco of £35K last year. Monthly commitment is just shy of £600. I noticed that with all the expenditure during the month ( i have a family) this has becoming a big burden for me.

I would really value responses to my question and read similar experiences. Any other alternative is also appreciate so does not involve securing my house or touching my mortgage.
Thanks

Firstly I am surprised you managed to get a personal loan for this amount, but it is good news that it isn't already secured on the house as that does give you more options.

Refinancing is rarely the solution, and I agree that the idea of some on a 0% card, overpayments on the loan etc. does seem a bit messy and, sadly, these ideas are rarely as successful as you hope (they tend to move or delay a problem rather than offering a solution).

We would suggest you do a SOA and, always start by trying to boost your income and reduce your spending, but if you have already done that as far as you can go the next step is to consider reduced negotiations with your creditors. This can be done yourself or with a free DMP. You pay what you can afford to credit debts and make sure that you maintain your home and living costs. If you are trying to keep your home out of the equation as much as possible I would suggest you avoid IVA's and bankruptcy.

All reduced options carry risks and you should talk to a free charity for full advice but the key issue is your SOA should list your income, your household bills and living costs first. The debts get what is left over, rather than paying debts first and trying to live off the rest. Good luck,


Laura
@natdebtline