Expensive Loan

DBKahuna88

Hello.

I'm a 31yo design engineer from Yorkshire.
Having spent most of my early 20's jumping from credit card to credit card and acruing ridiculous amounts of car finance I've spent the last 3 years wrestling the credit cards and loans under control.
Last November I was finally able to get all the debt in one place with one loan from the post office.

This paid off my credit card which is now at £0 (with an obscenly large credit allowance of £8700). I have not shut this credit card down as my credit score is benefited by having such a low utilisation. It's also got 10 months of 0.0% on purchases left so useful to have in emergencies in lieu of an emergency fund.
I combined it with my previous unsecured loan to make £17500 @ 9.9% !
Over 4 Years the monthly payment is £440.

As I moved in with my wife after she had bought our house she is the mortgage holder and looks after most of the household bills. I pay her a monthly sum that contributes towards the mortgage payment half the bills. (Plus or minus what she or I owe for groceries, meals out etc).
I'm going to add my name to the mortgage when it is up for renewal in a couple of years.
I've never asked her to contribute towards my debts as most of it is from before we even got together.

After bills, rent, budget and the loan payment I have £500 a month left.
We have a baby on the way (Exp June) so I had initially planned to put this money away and save as much as possible but it seems counter intuitive to save when this enormous expensive loan is humming away in the background.

What I wanted to ask was is there a better/cheaper way of paying this loan down?
Shoud I save to have money towards the baby or hammer the loan down with what money I can provide after the baby expenses.
My credit scores are increasing monthly and the situation is relativly healthy but I wanted to get this fantastic forums expertise rather than waste a step change advisors time and money.
Thanks.

My SOA 08/01/2020 is below:
Household Information[/b]
Number of adults in household 2
Number of children in household 0 Soon to be one
Number of cars owned 2

Monthly Income Details
Monthly income after tax 1903
Partners monthly income after tax 1600
Benefits 0
Other income 0
Total monthly income 3503

Monthly Expense Details
Mortgage 0
Secured/HP loan repayments 0
Rent.................................... 220
Management charge (leasehold property) 0
Council tax.... 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 135
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 80
Clothing................................ 0
Petrol/diesel........................... 80
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 15
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 316
Bank Charge 20
Total monthly expenses.................. 886


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1800
Other assets............................ 0
Total Assets............................ 1800


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... ...()...... 0
Total secured & HP debts...... ....-.........- 0

Unsecured Debts
Description....................Debt......Monthly.. .APR
Loan Post Office.........17500......440...... .9.9 16900 440 0
Credit card....................0............0.............0 0 0 0
Total unsecured debts..........17500.....440...... 16900 440 0


Monthly Budget Summary
Total monthly income.................... 1903
Expenses (including HP & secured debts). 886
Available for debt repayments........... 1017
Monthly UNsecured debt repayments....... 440
Amount short for making debt repayments. 0

Personal Balance Sheet Summary
Total assets (things you own)........... 1800
Total HP & Secured debt................. 0
Total Unsecured debt.................... 16900
Net Assets.............................. -15100

[Deleted User]

Unfortunately, your credit scores are high because you have a large debt and high utilisation, with just the single card with a modest limit. While it impresses the CRAs, it makes lenders nervous.

At such a high rate, focus on overpaying the loan, whilst still being able to maintain an emergency fund. Entertainment and phones looks to be two obvious areas to cut.

Unicorn_cottage

Hiya

What's going on with the mobile phone bill???!

Have you joined the MSE credit club to see if you could a 0% balance transfer card to clear some of the loan?

Unicorn_cottage

What's the bank charge for?

BoGoF

£135 on mobile phone?
£316 entertainment - what is this?

Scope for reduction I think.

sammyjammy

If you're insistent on keeping the credit card at least reduce the limit.

DBKahuna88

Sorry I forgot to mention I pay my phone bill, my wifes phone bill and the broadband under 1 bill with Vodafone. Get a decent discount by bundling them together.

The bank charge is the Natwest Account (Travel Insurance, Breakdown Cover and Mobile Phone Insurance for £20 a month)

The £316 covers £75 a week for any entertainment, unexpected costs, going out etc. £10 to dogs trust and a couple of patreon payments at £3 each.

Thanks for getting back to me.

DBKahuna88

I looked into the possibilty of transfering a loan to a balance transfer card but the only way i could find is to get a "money transfer" card which didn't look as beneficial as the balance transfer card.

[Deleted User]

DBKahuna88 wrote: »

I looked into the possibilty of transfering a loan to a balance transfer card but the only way i could find is to get a "money transfer" card which didn't look as beneficial as the balance transfer card.

It's more beneficial, because you can't use the BT card as your card doesn't have a balance. You're trying to clear a loan.

And it would be a lot more beneficial than the 9.9% you're paying.

DBKahuna88

I'm sorry I think I'm misunderstanding you.

Are you saying it's more benficial to get a money transfer credit card with a 0.0% for a certain amount of time and move some of the loan to it to reduce the interest being paid on the loan ?

[Deleted User]

Yes, if you would rather pay less interest.

However, make sure you can clear it - or move it - before it goes to the standard rate.