Advice with current loan please

Suffolk04

Hi, new to the forum so be gentle
I took a loan out in 2016 for £13500 which was to pay off mine and my dads car loans, since then his has been paid so its just mine.
As of today I owe £2436.93 with 7 payments of £340.50 to go.
I could easily afford it when I was living at home, but moved out a few months ago, so with the cost of rent,council tax,credit card etc, it's becoming a bit of a struggle, so was looking at getting a longer term loan to cut the monthly rate.
£2500 loan over 2 years is £114.13 pcm £2739.12 total
£2500 over 3 years is £78.79pcm £2836.44 total

I have £1600 saved in a first time buyer isa, but in two minds whether to use that towards the debt and get a smaller loan, or save it for emergencies.

Any advice welcome, no matter how harsh

[Deleted User]

If you're struggling with your existing payments, it's unlikely you'll be able to get further borrowing, although you could try an eligibility checker.

Visit the DFW boards for advice on cutting costs and repaying faster.

Suffolk04

Wow thanks for the quick response, I've done a eligibility check on my Experian account, it says I'm pre-approved for both of the loans listed.
I'll have a look at that section thanks, I'm getting mixed answers from friends and family of what option is best, so hopefully get some outside advice

DrEskimo

I personally wouldn't advise to re-finance the loan over a longer term. All you are doing is prolonging your debt and making the overall cost even greater.

You mention Credit Cards, so is it fair to assume you have some other debt outside this loan?

If I were you, I would be looking to make a detailed budget, looking to cut back on as many 'luxuries' as you can to overpay on your debts as fast as possible. Remember this is only a short term thing whilst you get your 'books' in order. The more you cut back, the quicker you will get debt free, so it's up to you how intense you want to be with it (and how large you debts are relative to your income).

The first step is to look at all of your current outgoings. Look over the last few months and work out exactly where all your money is going. Some find filling this Statement of Affairs (SOA) helpful, and some even post if over on the Debt Free Wannabe (DFW) forums to get help from others about where they can save money and what steps they can take to clear the debts in the most efficient way.

Put simply though, it's just a maths problem. You have income and you have outgoings. You need to either increase your income or reduce your outgoings....!

Good luck!

MEM62

Suffolk04 wrote: »

I'm getting mixed answers from friends and family of what option is best, so hopefully get some outside advice

Perhaps the best option is to live back at home until the loan is cleared.

Suffolk04

#DrEskimo, I work in the motor trade and needed to buy a new toolbox which wasn't cheap, so transferred it to a 0% credit card which has £600 left on it
I've done a budget, and after all bills are paid I'm left with £290 for food.

#MEM62, not really an option unfortunately moved out due to overcrowding.

Would it be worthwhile taking the money out of the isa?

DrEskimo

Suffolk04 wrote: »

#DrEskimo, I work in the motor trade and needed to buy a new toolbox which wasn't cheap, so transferred it to a 0% credit card which has £600 left on it
I've done a budget, and after all bills are paid I'm left with £290 for food.

#MEM62, not really an option unfortunately moved out due to overcrowding.

Would it be worthwhile taking the money out of the isa?

Perhaps more details on the loan then.

When you say split between you and your Dad, how was this done? How much did you owe and how much did he owe? Did you ensure the interest amount was included in the total amount owing for both of 'parts' of the loan?

Is £2436.93 the outstanding amount, or the settlement figure?

What is the value of the car it is against?

How long have you got on the 0% rate on the £600 outstanding on the CC?

Is the £290 before food with our without the £340.50 loan repayment?

Suffolk04

We got settlement figures for both cars, so took a loan out as it was cheaper, he got an injury payout at work so paid the amount he owed and half of the total interest cost.
The £2436.93 is the settlement figure and the car is worth roughly 10k
Sorry I meant I have £600 left to spend on the credit card, the 0% runs out Sept 2020, and after all my Bill's including the loan I have £290 to spend on food etc.

DrEskimo

Well one option would be to sell the car and use a small part of it to buy a cheaper run about, and the rest to clear the loan, the Credit Card debt (not clear how much this is) and anything left over can be used to build a emergency fund/go towards savings.

That would also free up £340, plus whatever you currently need to pay towards the CC to clear it by Sept 2020, on your monthly budget and give you more than £290 for food, and the 'etc.' that you haven't budgeted for yet.

Suffolk04

Thought about selling it as a last resort, it's a 64 plate which I've had since new, so it's cheap to run, reliable and low insurance, where a cheap older car could be a cheap at first, but knowing my luck would need end up being a money pit lol.

My credit card debt is £3,914.97, so I could potentially pay it all by selling the car and have around 2-3k to get something decent

DCFC79

Suffolk04 wrote: »

Thought about selling it as a last resort, it's a 64 plate which I've had since new, so it's cheap to run, reliable and low insurance, where a cheap older car could be a cheap at first, but knowing my luck would need end up being a money pit lol.

My credit card debt is £3,914.97, so I could potentially pay it all by selling the car and have around 2-3k to get something decent

If you pick the right car an older car wont be a money pit.