Struggling with debt? Ask a stepchange debt adviser a question

rocktron_amp

Hello there.

I have taken out a Personal Loan to help avalanche credit card and consilidate debts.

I have 6 credit cards, 4 cards with high balances, but the loan is only enough to knock out 3 highest cards with high interest rates.

Does StepChange offer independent advice on pay down strategies. Avalanche vr Snowball?

I created a Google Spreadsheet to experiment on pay downs. I think I have an idea, but I'd like to double check my thinking with experienced / experts. Does StepChange offer that service?

StepChange_Aidan

rocktron_amp said:

Hello there.

I have taken out a Personal Loan to help avalanche credit card and consilidate debts.

I have 6 credit cards, 4 cards with high balances, but the loan is only enough to knock out 3 highest cards with high interest rates.

Does StepChange offer independent advice on pay down strategies. Avalanche vr Snowball?

I created a Google Spreadsheet to experiment on pay downs. I think I have an idea, but I'd like to double check my thinking with experienced / experts. Does StepChange offer that service?

Hi,

Unfortunately, StepChange can’t offer much advice on payment strategies like these, but I can see that you’ve already had some good responses from your other thread on the board.

If you’d like to discuss your situation and options in more detail with us, please give us a call.

Regards,

Aidan

stinabean

Hello

I work full time, very stable job. My partner isn't working due to mental health issues, and we have quite a lot of debt. 
We also have an actually-falling-down conservatory that's full of mould and unusable.

I was considering taking out a mini mortgage i think it's called, with nationwide. So far my reasoning is to sort the unsafe structure and put all our debt in one monthly payment. This also reduces how much we're paying each month significantly which would help us a lot as we're struggling in general spend ie food, petrol. 

It sounds like a good idea to me, less going out every month, less stress on me as working a lot of OT, but also v wary of borrowing against the house - can I have thoughts please? 

StepChange_Aidan

stinabean said:

Hello

I work full time, very stable job. My partner isn't working due to mental health issues, and we have quite a lot of debt. 
We also have an actually-falling-down conservatory that's full of mould and unusable.

I was considering taking out a mini mortgage i think it's called, with nationwide. So far my reasoning is to sort the unsafe structure and put all our debt in one monthly payment. This also reduces how much we're paying each month significantly which would help us a lot as we're struggling in general spend ie food, petrol. 

It sounds like a good idea to me, less going out every month, less stress on me as working a lot of OT, but also v wary of borrowing against the house - can I have thoughts please? 

Hi,

Thanks for your post.

I wouldn’t typically recommend taking out any secured debt unless you have no other option, as it can put your home at risk if you have any problems repaying it in the future.

How much will the repairs to the conservatory cost? Will it be possible to fund them by stopping or reducing the payments to your unsecured debts for a few months? If you have other debts but are already struggling to cover your general spending, I’d recommend getting full debt advice before you make a decision.

We would need more details to be able to give you specific advice. If you’d like to create a budget with StepChange you could use our online tool or give us a call to speak with an advisor.

I hope this helps,

Aidan

h0urgl455

Hi There

I am very close to being debt free - by the middle of July I’ll be down to £600 debt from circa £15000. The majority of this has been paid off in recent weeks thanks to some extra income.

The debt came from a personal loan for business use, and a defaulted car loan.

The original car loan wasn’t due to be paid off until 2028, and I will have it paid off in a couple weeks. Despite this I’ve been advised that the default will remain on my credit file, but marked as settled or satisfied. Is this likely to drastically increase my credit score? I’d imagine not as much as if the default was removed entirely. I’m looking at adding a Notice of Correction to my credit file, but wondered if there was anything I could do that I hadn’t thought of. I’ve drafted a goodwill adjustment request letter.

Similarly there are some missed/late payments with these lenders (none in the last 7 months) which ideally I’d like removed since I am repaying the debt earlier than originally agreed.

I just need some advice on what my options are, and what the best course of action is. I’m also looking to take out PCP on a vehicle once I have cleared my debt.

All advice is appreciated, thanks in advance. 

StepChange_Aidan

h0urgl455 said:

Hi There

I am very close to being debt free - by the middle of July I’ll be down to £600 debt from circa £15000. The majority of this has been paid off in recent weeks thanks to some extra income.

The debt came from a personal loan for business use, and a defaulted car loan.

The original car loan wasn’t due to be paid off until 2028, and I will have it paid off in a couple weeks. Despite this I’ve been advised that the default will remain on my credit file, but marked as settled or satisfied. Is this likely to drastically increase my credit score? I’d imagine not as much as if the default was removed entirely. I’m looking at adding a Notice of Correction to my credit file, but wondered if there was anything I could do that I hadn’t thought of. I’ve drafted a goodwill adjustment request letter.

Similarly there are some missed/late payments with these lenders (none in the last 7 months) which ideally I’d like removed since I am repaying the debt earlier than originally agreed.

I just need some advice on what my options are, and what the best course of action is. I’m also looking to take out PCP on a vehicle once I have cleared my debt.

All advice is appreciated, thanks in advance. 

Hi,

Thanks for your post and well done on nearly being debt free.

If a debt has been paid in full but had previously defaulted, it will be marked on your credit file as ‘satisfied’.

I can’t say for certain how this affects your credit scores, as each credit reference agency has their own method of calculating them. However, these scores are for your information only and are not typically seen by lenders. Instead, lending decisions would be based on the full data on your credit file.

There’s no harm in asking, but your creditors are unlikely to agree to remove defaults or missed payments from the file, as it’s meant to be a factual record of your credit usage. You can ask a credit reference agency to add a notice of correction of up to 200 words explaining the cause of the debt or why you feel the information is misleading, but please be aware that this will slow down applications for credit in the future, as they would have to be manually checked.

In any case, the debt will be removed from your credit file six years after the default date, and going forward, you’ll be able to improve your credit file by making sure that bills are paid on time and with sensible use of credit.

There’s some more information on credit files and scores here.

I hope this helps,

Aidan