Loan repayments

pilky01

I'm currently in financial difficulty due to an excess of payday loans I’ve (stupidly) taken out over the past few months. These have mounted up and I’ve found myself taking on extra debt at the end of a month to cover living costs and repayments. Luckily I’m living rent free, but do have car payments which go out each month. I will be in a position to sell this car however it needs some repairs before I can sell it. I’m slightly in negative equity with my car, so with the work that needs to be done on it I’d probably have to cover £800 to settle the finance – this is money I don’t currently have.

I’ve spoken to a few of my lenders who have agreed to reduce my next payment, but I’m still going to be in difficulties over the next few months. After April I expect my financial position to be a lot stronger, so I don’t want to enter into an IVA or anything that will have a very negative effect on my credit score - within the next 3/4 years I'd like to get on the housing ladder.

What advice can you give me to get through the next 4/5 months with the high outgoings I have? Feel free to ask any questions!

Thank you so much!

EssexHebridean

Get your outgoings in priority order for a start - rent/mortgage. heat, light, food, utilities. Maybe start by doing a Statement of Affairs (SOA) - the link is in my signature and also in the sticky post at the top of the board - feel free to post that here once completed and people will be able to offer where savings can be made also.

One thing though - you say you're looking towards getting on the housing ladder in the next few years - you realise that the payday loans will have an impact when you come to apply for a mortgage, do you? You might need to think closer to 6 - 7 years after the point at which you have them paid off, if you want the best choice of lender and rates.

In the short term though, get the SOA done and remember that priority bills get paid first, the loans get a share of whatever is left after that.

pilky01

Thanks for your reply. I will certainly get one of these completed.

I was aware that payday loans will have an effect on my credit score, but didn't know it would have an impact on getting a mortgage for 6/7 years!

Isn't hindsight a wonderful thing.

pilky01

Please see my SOA below, if you have any questions about anything please ask

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1600

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 287
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 80
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 60
Clothing................................ 20
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 60
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 667


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 5500
Other assets............................ 0
Total Assets............................ 5500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 6398.....(287)......12.2
Total secured & HP debts...... 6398......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................990.......247.......49.9
Loan...........................4736......198.......79.9
Store Card.....................1226......62........29.9
PD Loan 6......................420.......70........292
PD Loan 5......................100.......50........292
PD Loan 4......................140.......70........292
PD Loan 3......................250.......100.......292
PD Loan 3......................400.......80........292
PD Loan 2......................480.......120.......292
PD Loan 1......................150.......75........292
CC.............................250.......40........0
Store Card.....................325.......60........0
Total unsecured debts..........9467......1172......-


Monthly Budget Summary
Total monthly income.................... 1,600
Expenses (including HP & secured debts). 667
Available for debt repayments........... 933
Monthly UNsecured debt repayments....... 1,172
Amount short for making debt repayments. -239

Personal Balance Sheet Summary
Total assets (things you own)........... 5,500
Total HP & Secured debt................. -6,398
Total Unsecured debt.................... -9,467
Net Assets.............................. -10,365

BookmobileBadGirl

Are you paying the minimum on your credit card and store? If not drop it down to the minimum as you aren’t paying interest.

No new clothes for the next three months, that will give you £60 to overpay

No haircuts for three months, that will give you £30 to overpay

Can you do anything about your £80 phone bill? This is way too high

Very little entertainment for you for the next three months, cut this in half. It may also help reduce the amount you spend on petrol and travel.


If you can find this extra money you should be able to get rid of a couple of the PD loans early on, allowing you to put that money towards the others.

The big loan at almost 80% does concern me

sourcrates

Hi,

The very fact you have payday loans on your credit file, will have a negative effect on your ability to borrow further.

Mainstream lenders see it as a big red flag.

This may be of some use to you if these loans have become a problem :

https://debtcamel.co.uk/payday-loan-refunds/

Unicorn_cottage

Can you sell the car as is and settle that hideous loan with the cash?

pilky01

The sale of the car will settle the finance agreement I have. I'm currently very slightly in negative equity, more so because there is some bodywork needed on the car - I don't currently have the money to pay for this

Unicorn_cottage

Can you sell at at a lower price stating that this takes into account the bodywork needed? I know this is not the best option but may be an answer?

pilky01

This is something I'd considered, and I have listed the car for sale at a lower price. The issue I have is that at the lower price, I'd have to put in around £600-£800 to settle the finance when selling - money I don't have at the moment