Is this a good idea??

getmore4less

Where there is no overpayment penalty longer period to give flexibility over shorter period and commitment to higher payments.

The key will be the numbers across all debt especially that overdraft.

worriedDan

Thanks folks, I will do a SOA tomorrow when I am less sleepy!

worriedDan

Here is our updated SOA. This is as it stands now. I have included min payments, however we have been literally throwing everything at the debt recently, hence why it has come down from 65K.

You will see that we are saving quite a bit. There are a few potentially expensive things that will need repairing/replacing around the house soon and we don't ever want to have to rely on credit again.

We have also allowed some money from a holiday. We discussed this at length and decided that a short break next year ( we both turn 40) would be OK as long as it doesn't impact on our plan to clear the debts.

My car is also getting old and whilst I haven't reflected this in the SOA, I do need to start thinking about this as again, I wouldn't be willing to borrow money for a car again.

Thanks for everyones ongoing support

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 3580
Partners monthly income after tax....... 1250
Benefits................................ 0
Other income............................ 250
Total monthly income.................... 5080

Monthly Expense Details
Mortgage................................ 507
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 105
Electricity............................. 52
Gas..................................... 41
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 0
Mobile phone............................ 40
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 30
Groceries etc. ......................... 250
Clothing................................ 50
Petrol/diesel........................... 200
Road tax................................ 5
Car Insurance........................... 90
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 120
Other child related expenses............ 110
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 0
Life assurance ......................... 29
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 10
Entertainment........................... 100
Holiday................................. 100
Emergency fund.......................... 500
(Unnamed monthly expense)............... 0
Total monthly expenses.................. 2561


Assets
Cash.................................... 3100
House value (Gross)..................... 195000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 205100


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 59000....(507)......1.89
Total secured & HP debts...... 59000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
creation loan..................4100......248.......9.9
bcard..........................10400.....220.......6.9
MBNA...........................2150......22........0
HMRC debt......................1500......50........0
Bcard 3........................800.......10........0
Bacrclaycard 1.................4500......45........6.9
creation CC 1..................5000......50........0
Halifax CC 2...................2750......28........20
Halifax cc.....................4500......115.......20
Total unsecured debts..........35700.....788.......-


Monthly Budget Summary
Total monthly income.................... 5,080
Expenses (including HP & secured debts). 2,561
Available for debt repayments........... 2,519
Monthly UNsecured debt repayments....... 788
Amount left after debt repayments....... 1,731

Personal Balance Sheet Summary
Total assets (things you own)........... 205,100
Total HP & Secured debt................. -59,000
Total Unsecured debt.................... -35,700
Net Assets.............................. 110,400

Dobbibill

I don't see the overdraft listed with the debts - how much is this?
Could you not put the emergency fund money into the overdraft and make this neutral - it would save £30 in charges each month and keeping it there would allow for the emergencies.

Throwing every spare penny at the debts too would see Halifax CC2 gone in 2 months. Repeat for Halifax CC for the following months and those 2, which appear to be attracting the highest APR, will be gone in a few months - probably in a lesser time than the loan term would be.

Just my thoughts.

enthusiasticsaver

I still don't think consolidating is a good idea. You have enough income and surplus to sort this out in a few years rather than the 5 years a loan would be repaid over. I agree that you should use your savings to clear the overdraft and save yourself the £30 monthly fees. Unless the overdraft is more than £3k you should still have sufficient in savings to cope with most emergencies like a car repair bill or temporary home repair until the debt is gone and you have enough to save for the big outgoings. Focus on the Halifax cards first.

As you say you don't ever want to be in this mess again. I would want to get rid of this ASAP and then focus on building a secure financial base. Taking out another loan is not the answer even if you tell yourself you are moving it to save interest. It just gives you permission to delay dealing with it.

worriedDan

Hi, sorry for absence. We have been house sitting for my wifes brother in Devon - lovely free week away, despite some rain at times!

I did forget to include the overdraft fees in my SOA. These would be around £30 per month if we are using the fill £1000 OD

When the 0% interest rates finish on the Halifax cards, plus the OD fees we would be paying £220 per month in total with around £140 of this payment being interest and fees

One of the things that I don't think I mentioned earlier is that my wife's job may be at risk due to redundancies. We will no more after September. Whilst I am sure she would find a new job, it does worry me that we could see a drop in income for a short period. She would receive about 6K in redundancy money which would be great if she could get a new job straightaway, however there are no guarantees.

I suppose the option of the lower payment and less interest feel like a safer option. Our plan would be to massively overpay, providing that our income is still the same.

We need to discuss it more as it was strictly out of bounds last week whilst we were away - we banned any conversations about money or work!

Unicorn_cottage

Use your emergency fund and cash to pay off your overdraft and pay the rest off the highest APR credit card (which ever is ending soonest). Can you give details of when the 0% cards end?

enthusiasticsaver

I would certainly also advise using the savings to pay off the overdraft both to save on the fees but also the mentality of having an overdraft buffer often leads people to overspend on a month by month basis rather than focus on living within their income. Also an overdraft can be withdrawn at any time.

Personally I would stop the £500 to emergency savings and prioritise repaying the debt. That Halifax £2750 could be gone in 2 months with your surplus and the £500 to emergency savings.

getmore4less

£30pm fees on OD upto £1k over 35%.equivilent

What is wife's net income after her cost to get to work and run a car and childcare costs?

Sometimes you a better not saving and just overpaying then borrow back when the planned spend is needed.

Try to hold of the car you might only need one.

sazaccount

Your SOA says you have 1700 left over each month, this and using the emergency money can get rid of your overdraft and one cc card within a month then another 2 1/2 months for the other halifax card having an emergency fund is great however this can be build back up again or keeping say 1000 and using the rest to pay of the cc. I personally think snowballing would be a great plan for you.