how or when should you refinance a loan

theoretica

catlady1990 wrote: »

... I am coming up to the 1 year mark and with consolidation everything including the car and the loan would be paid off by 3 years.

What rate are you counting on getting for consolidation? No point even thinking about consolidation unless the rate came down significantly, otherwise you just overpay the debt and it goes sooner anyway. Your car loan will be gone in under 3 years giving you considerably more to overpay your present debt.


If your career leads to pay rises this will make everything much easier.

MovingForwards

Ok, your SOA isn't too bad, as long as you do have just under £100 per month spare. You may want to keep a spending diary for a month or two, log everything you buy and see if you do have that left each month, best case is you stop spending a few quid on treats etc

Is your OH paying the utilities / council tax?

Nothing for contents insurance?

Looks like you have double calculated for your car as it's in your budget and under HP.

Clothing I would budget £5 a month to buy smalls, wear what you already have as I guess you have a wardrobe full?

For the petrol I would work out the lowest you get per month and put that under other income.

You will then have a more realistic idea as to income and expenditure

Next, we can look at your debts. I would suggest snowballing them, pay a pound over what you currently pay, then throw all your spare money at the highest APR credit card. When that ones done, throw the money at the next highest. CC's are a funny thing as the APRs could go up, your loan is a fixed APR for its life.

Also, keep your emergency fund in a separate account, means you can't instantly dip into it

Once you have a few months under your belt you can then look at saving a small amount eg the 1p a day savings challenge or putting all your pennies (99p and under) into an interest paying account, it soon adds up!

catlady1990

We live in a shared house so bills are included in our rent which we have. Contents insurance we are covered through our bills which we split every week anyway.

If I'm at work, I take lunch and at home we tend to eat at home. On the rare occasion we go out for food or takeaway, it's already budgeted again in the money we set aside each week.

I rarely shop to be honest

MovingForwards

In that case just look to see if you have double counted your car payment, snowball and you will be looking to buying your own home

Good luck and feel free to start a debt free diary, many of us have and it keeps us focused, accountable and we all support each other.

enthusiasticsaver

The reason your loan payments are high is because they are fairly high rates. You are unlikely to get better ones as you now look as if you are over committed in comparison with your salary so I definitely would not recommend consolidation. You will not get one approved anyway as any lender will look at your existing commitments and calculate you cannot afford a large loan as they will not assume you will pay off the old debts with it.

I rarely recommend consolidation as it almost never helps people get out of debt and more often it worsens the problem and I guess this is what has happened here. Presumably the loan (not for the car) was for old consolidation of debts and now you are building the cards up again. You have also gone for a car too expensive for you. An older cheaper car could have done you for a few years and you would not be saddled with an extra £5.7k of debt. On the plus side the car will be yours once the loan is gone so it is not as bad as a PCP deal which many go for.

You have a small surplus but you have not allowed for emergency savings which is a must if you have a car. Realistically until you get a better paying job a mortgage is out of the question so I would put that to the back of your mind and sort out the debt first. Is that car insurance £100 every month or is it likely to go down in September? That might help. I would target the credit cards first and get rid of them. Then tackle the more expensive loan.

Unicorn_cottage

How long will it take to become a registered Veterinary Nurse and how much will you earn?

catlady1990

The only reason I bought a newer car was because it is still covered by the warranty which actually reduces car bills overall. My insurance will drop in september as that it when my no claims bonus will be reinstated. That should add at least £20/£30 to what I already have as spare money. I'm a long way off being a registered veterinary nurse. I have to wait at least a year / 18 months for a clinical coach to become free. Then it's a two year course. My wages will go up the more years I work with the company but not by much. After December

JayRitchie

Is the car likely to last a few years from when it is paid off? If so that will help your finances loads.

catlady1990

Yes it is, that is why I bought a car that was 1.5 years old. So the bills will be relatively low compared with a 6/8 year old car.

enthusiasticsaver

catlady1990 wrote: »

Yes it is, that is why I bought a car that was 1.5 years old. So the bills will be relatively low compared with a 6/8 year old car.

That would be sensible if you could afford it but you can't and have accrued £10k of debt trying to sustain paying for it. Your car is costing you more than your rent.

Have you stopped using the cards now? In other words do you actually have that surplus each month? If you do I would start with that £250 credit card and pay as much as possible off that using surplus and overtime. I would also start putting £50 a month into emergency savings so you are not forced to increase your debt. If the car insurance reduces then put that towards the debt too.

You are getting close to debt solution territory so if you want to turn this around you will need to be disciplined and stick to your budget. Hopefully as the debt reduces you may get offered a 0% deal.