Rock Bottom - £65,000 of personal loan debt. Time for action

itchyfeet123

cg81 wrote: »

Employer makes a x2 I am sure it is contribution. It used to just be matched. Are you suggesting that be better to go with the minimum amount given there’ll still be some sort of contribution?

I’d still have more monthly even if did that. My issue was that there’s £25k in pot but it’s lost a lot of value in last year

But how much of the 25k did you put in? If your employer is paying 200% of your contribution, then just over £8k was your money to start with. Even if the markets crash and you lose 60%, you'll have £10k, or a 25% return on your £8k. Your highest interest rate is half this. In other words, you should come out ahead even after paying a high rate of interest on your debt.

If you put your £150 towards your 11% debt, each month you' re avoiding 0.11/12x150=£1.38 in interest. But you're forgoing £300 from your employer, and more if you pay into your pension pre-tax.

TheLostSheep

Re the mortgage, it’s with HBOS. If there’s the ability to do a product transfer via them to another provider then that’d be useful. There’s definitely 2 or 5 year fixed rates that’d lower amount to repay to £540 - £560.

Thanks for advice.

TheLostSheep

itchyfeet123 wrote: »

But how much of the 25k did you put in? If your employer is paying 200% of your contribution, then just over £8k was your money to start with. Even if the markets crash and you lose 60%, you'll have £10k, or a 25% return on your £8k. Your highest interest rate is half this. In other words, you should come out ahead even after paying a high rate of interest on your debt.

If you put your £150 towards your 11% debt, each month you' re avoiding 0.11/12x150=£1.38 in interest. But you're forgoing £300 from your employer, and more if you pay into your pension pre-tax.

Thanks for this and good point. I’m going to continue to contribute at least something (min 1%) I think as they’ll x2 match pre tax. That still gives me just under £100 hopefully extra for debt repayment.

My priority has to be tackling the debts. I’d initially wondered if could take pension but that seems a definite no starter as way too young.

EssexHebridean

Once you factor in thinking about the future, probably not a good idea even if you HAD been able to!

TheLostSheep

A short update.

Got responses from 2 others lenders with Lenfingw*rks appearing the ones of most initial short term help agreeing to a £1 token Payment Plan for next three months whilst continue to look to reassess.

Z*pa, well they seemed to find it difficult to read a word and excel SOA and implied I had over £700 free for monthly payments when I don’t - it’s -£800 and a bit more as it stands.

I need to chase back Creat*ve as they said they’d come back to me quickly having me provided a SOA, full details and a 30min call.

Just Honeyc*mb to get. Will call them start of week. Letter and SOA is with them. Payment is over 2 weeks away.

Re a mortgage it’s looking like can get down to £540/£560 if fixed for a 2 or up to 5 year period. There’s a £40/£60 saving in there but will need to action within next week.

I should have a revised SOA in next few days. I accept it’s a temporary holding position re the loans and need to work out if there’s a way to get back paying them in full or as near to full. Otherwise it’ll need to be DAS or DMP which really want to avoid

Kitten868

Hello there,

Sounds like you're doing all the right things and getting there.

First things first. Please dont under any circumstances tell your mortgage provider you're having financial problems. Just tick along as usual. If your fixed rate is coming to an end or if you're on standard rate then contact them for a new fixed rate. You can definitely do much better than 4.9%. However, if you're in the middle of a fixed rate then leave it for now as the early repayment charge will kill any savings. I say this as you can afford your mortgage payments but not your unsecured debt.

Secondly have you sought help with the gambling issue and sorted out exclusion from all sites? You know what you need and I realise it was a blip but you've seen how quickly it can make a bad situation worse.

I attacked my bills when undertaking this. Council tax to 12 monthly payments, new energy tarriff, internet on a new deal. It did cut things down a bit. Then I sold everything and that made a huge dent.

It sounds like your leaning towards a self managed DMP. The main advice on this is £1 payments to creditors to get them to default you, build up some emergency savings and work out your budget. Once you're a well oiled machine with enough savings behind you then you start looking at what you can afford to pay your creditors. Then it's just getting the debt down at a rate you can afford. Have a read of the DMP support thread or diaries here to see what you think of a DMP and whether you want to do it yourself or leave it up stepchange.

Keep going you can definitely do this. Xxx