Is there a smarter way of me getting out of debt?

mcscoobs

I guess the question is, I want to work smarter, not harder

So here's my current debt issues:

Sofa from Sofology since November 2017
Settlement figure as of today: £1045.81
Last payment due: 01/10/2020
Currently paying: £45.47 per month
Term: 36 months - 0% APR

Loan from Halifax
Loan taken out totalling £18,000.
Remaining: £17,177
Monthly payment: £330.75
APR: 7.9%
63 months to go out of 67 month term
Settlement figure is £17,400 as of today

Barclaycard
Current Balance: £6300
Credit Limit: £14,700
Currently monthly payment: £120
0% balance transfer for another 18 months

Tesco Credit Card
Current Balance: £0
Credit Limit: £5300

Car loan
Total loan taken out: £4,000
APR: 14.9%
Current monthly payment: £138.55 per month
36 months - repaid £554.20 so far

So currently everything is manageable and i'm able to pay each month, that's not an issue. But i'm wondering if I can work smarter and juggle debt around?

With regards to my circumstances, I may soon be in a position where i'll be living back home (relationship breakdown), which may potentially mean i'll have another £1000-1500) a month to play with to put towards debt.

Any advice is appreciated!

Unicorn_cottage

Hiya! Best thing to do is fill out a statement of affairs using the following link and post the results on here so people can advise on changes you can make to save money etc.(http://www.stoozing.com/calculator/soa.php)

Have you heard of snowballing? It looks like the best way for you to tackle these debts is to overpay the debts with the highest APR first so you will pay them off faster and pay less interest - http://www.whatsthecost.com/snowball.aspx

Rocco86

From a quick glance have you considered using the Barclaycard to pay off the car loan as your card is currently 0%. Then use the car payment as either overpayment to loan or if you can't do that use it to overpay Barclaycard.

mcscoobs

This did cross my mind, think the minimum payment on the barclaycard (currently £120) would increase massively with another £3500 put on it?

I do currently slightly overpay barclaycard each month, I pay £150. Not a huge amount but its something

redux

Rocco86 wrote: »

From a quick glance have you considered using the Barclaycard to pay off the car loan as your card is currently 0%. Then use the car payment as either overpayment to loan or if you can't do that use it to overpay Barclaycard.

The way I would read that is the transfer offer on BC may be historic, done a year or so ago, and not necessarily available right now.

Paying a loan back direct from a card isn't usually possible, and the intermediate step of a money transfer out to a bank isn't available on all cards.

It would also involve paying it back in 18 months instead of 32, or finding a new 0% offer later to replace the remainder of that one. Either of these may be possible, but it's worth doing some arithmetic to check if the cashflow fits.

mcscoobs

Appreciate the response. The barclaycard is relatively new, I've checked and I do still have a 0% offer for 18 months. Also, the Tesco card, I could probably get a 0% deal of sorts if I spoke to them. Not sure if I have a money transfer offer available on Barclaycard but I definitely do on the Tesco card. Paying it back in 18 months is certainly do-able and my preferred option when my circumstances change from January.

In the meantime, I've just requested a settlement figure for my car loan.

enthusiasticsaver

How did you manage to accumulate that much debt is the first question? Do you own a property or is this debt consolidation from overspending?

Moving the car loan by using a 0% money transfer card would save you money providing the BT fee is not too high. Paying £634.77 in debt repayments against £28k approx of unsecured debt sounds relatively high but it depends on your income. Both of your loans are charging a relatively high interest rate which would indicate either you are overstretched financially or have some defaults/late payments. I would use your reduced outgoings to sort out the debt issue before it gets further out of hand.

mcscoobs

I used to be in a mess financially, loads of little loans, store cards, high interest credit cards, a familiar story. I was finally able to get on top of things by getting a relatively big loan to consolidate the debt. I earn a decent wage. I should be able to clear the big loan in a year as of January, that's the plan anyway!

The car loan is via a Salary Sacrifice scheme through my work, which I opted for as I needed a car asap (at the time), so took it even though the APR was higher than I liked. Need to get rid of this big loan!

DD265

I'd be tempted to see whether you can do money transfers to both cards - one for the car and the other for some of the loan. That said, you'll need to do the maths on the MT fees and also repayments to make sure that it's still affordable and cheaper than paying the interest as it stands now.

This might be helpful though it's only an indication: https://www.barclaycard.co.uk/personal/credit-cards/interest-calculator

You also need to make sure that you have some cash for an emergency fund so that would be my first priority, followed swiftly by the car loan (unless it's become interest free by virtue of a MT). My aim would be to get the Barclaycard balance below the Tesco limit so that I could (theoretically) do a balance transfer at the end of the interest free period if I had to.

Craig1981

personally, i wouldnt add to your card now to clear the car loan, unless you can afford to pay more now... the £120 paid on barclays is from my calculations, the minimum already. and unless the offer a Money Transfer, this wont work anyway. you going to have a high interest rate on barclays on a high balance once the 0% ends as it stands

if tesco do offer a MT for 12 months ( i get this on mine on a monthly basis), again, this will nearly max out your card, and to clear it in 12 months would be around £300 odd (dependant on the settlement figure for car loan. that would be an extra £170 a month more than you paying out at the moment. if you only pay the £135 odd, then you will be left with £2k on the card with 19.9% (assumed) APR, higher than current loan now

as already suggested, if you post a SOA, people may give some constructive advice on where to cut back/save some extra money to overpay some of the loans.

natlie

I'd pay minimum on Barclaycard for now and throw cash at Sofology just to get rid, then the car finance.

The Barclaycard payment should be transferrable to another 0% offer if your credit rating is good

I would let the loan tick along until you have the extra cash from paying the sofa and car off