Pay debt off or use car sale cash as house deposit?

monetxchange

Sorry if I missed it - what's the situation with you now owning a car? Is the one showing another car extra to the one you sold? If you're now without a car, remember to keep in mind you'll have extra in your budget in terms of no insurance, tax or petrol, but maybe extra public transport costs. Might be worth rejigging your budget with this in mind.

As others have said, there's not much else to trim, based on this being accurate spending. I'd say use the money to pay down the debts, be strict with yourself with budgeting and saving and then you'll have a deposit in no time. I'm currently looking into home owning myself and one of the affordability forms I looked at asked about how much you have in terms of monthly outgoings inc debt repayments. I'm waiting to be debt free to buy so I'm in a comfortable place and have a buffer - I know there'll be extra expenses in moving, maybe a short term rental needed as a stopgap, needing to buy new furniture etc. Not being right up to the wire with what you can afford will be so much better when it comes down to it.

Unicorn_cottage

Clear the following with the cash

Loan...........................9200......250...... .10.5
Credit card....................2980......35........12.9

Put the rest in an emergency fund and do not touch.

Start paying down the other debts. Have you tried the snowball calculator?

https://www.stoozing.com/snowball-calculator.php

Willing2Learn

Hi,

Here are my thoughts on your SOA:

• If your salary income and benefits income both fluctuate due to varied shift patterns, then I recommend using the minimum monthly amounts for your SOA.
• Are your water rates spread across 10 or 12 months? And is it metered?
• For clothing, you have inputted £25/month. Is this realistic, when you have 2 children?
• You need something set aside as an Emergency Fund (EF). An EF is probably one of the most important aspects of all successful monthly budgets

Regarding your cash savings of £13,700. If it were me, I would reallocate £1,700 into your Emergency Fund budget category. Then £1,000 would go toward cancelling out your overdraft (as this facility can be recalled without notice). And the remaining £11,000 I would use to pay down the debts with the highest APR.

whydoineedone

I’d defo pay off the debt. This will enhance your credit rating, save you loads if interest, and get you a better rate on the mortgage. Use the savings to save money so you don’t ever get into debt again.

GolfR

Thanks for all your replies. I’ve decided to pay off the 10.5% apr loan (£9200) and the 12.9% cc (£2980) and I’m debating whether to put the rest into an emergency fund or to pay some off my Barclaycard, to be left owing 1k which I will then increase my dd to pay £125 a month which will clear it by the end of August. I almost cleared my overdraft when I had a tax rebate a few months ago but I stupidly ended up spending it so I would prefer to leave my OD until just before I have to start paying fees as I don’t trust myself to keep it cleared until I have this incentive. I‘ve made a plan of which I should have paid off all my debts apart from the big low interest loan (my original car purchasing loan) and my sofa by the end of this year.

To answer questions - no their dad does not have them (partly why I left) so if I’m not in work they’re with me so a second job wouldn’t work.

I have another car which I bought with my 10.5% loan - it was already on £6000 approx but I borrowed another £3500 and bought it, I can’t get to work or anywhere without a car as I live in a pretty remote area of wales. The loan was on £9700 last week but I’ve had good pay this month so I paid £500 off the balance a few days ago.

Unicorn_cottage

Hey GolfR

Just to say as well that I noticed you have some furniture etc on 0% finance. Just to say that don't be afraid of buying 2nd hand as it can save you a lot of money. When I moved into my house I got my fridge/freezer, dishwasher, and bed frame all 2nd hand. The dishwasher only cost me £40 and whilst it has packed in now it only cost me £10 a year

Best of luck to you anyway

GolfR

Hi Unicorn,

I never thought to buy second hand tbh, my current bf’s parents gave me the sofa I had when I moved in but I’ve always wanted a corner sofa that ex wouldn’t allow so it was something I had to do when living on my own!!

So an update on anyone who’s interested, yesterday (after receiving the payment following some missing signature drama with the company I sold the car to) I finally paid off the 10.5% loan, cleared the 12.9% credit card and paid £1500 off the Barclaycard. I feel such a relief and like a massive weight has been lifted off my shoulders. I have a plan in place to get everything apart from two things paid off by the end of this year and to get my £13,500 car loan paid off by hopefully the end of next year :j

Unicorn_cottage

Well done GolfR! Lots of luck for the future and keep us up to date on how you are doing

EssexHebridean

Get that Graduate overdraft cleared ahead of the 0% ending as that will start costing you a lot at that stage. That is a priority over and above whatever else you decide to do from here forwards in my opinion. (as and when you pay a chunk off it, ask to have the limit reduced as well - this will reduce the temptation to dip into it again.)

I think clearing a chunk of the debt off was the right decision - had you even clarified whether you would have been offered a decent rate with that level of debt-to-income?