Help and Advice Needed.

squirrel_pigeon

Hi. Welcome Can I just say PLEASE don't touch First Plus. Search First Plus on this site and you'll see why...

Scarlett.1974

but I cant believe I could spend less than £1300 running the house

Re this comment above - what exactly is this for? Just groceries and clothes? Are you serious?

If you're really spending that much on clothes and food every month then you must have more clothes than you could possibly ever wear! Get 'em on ebay!

Could you break this down a bit, show us exactly what this money is being spent on?

You've had some excellent advice already, so I don't really have much to add to it, apart from these 2 comments:

1. If you are really serious about getting out of debt you have GOT to downsize your lifestyle. Really listen to the advice you have been given regarding the changes you need to make, these people know what they're talking about.

2. Do NOT touch First Plus with a 10foot bargepole. They will suck you in and bleed you dry. Trust me, I am speaking from VERY bitter experience here.

chevalier

my comments are in blue

lavajelly011 wrote: »

Hi

I need to get out of my debt situation which is in the order of £90,000. This is all unsecured debt and nothing to do with my mortgage which is an additional £330 000.

I have been looking to consolidate my debt into a structured loan payment. I have had 2 scenarios which I can take up and would like some advise on whether these look ok and in your opinion which is preferable.

Offer1
Take a secured load for £40,000 and an unsecured loan of £8000.
Details of secured loan
Provider – Abbey (Also my mortgage supplier)
Amount - £40,000
APR – 7.14 fixed for 3 years (variable after this)
Term of loan – 15 years
Payment per month £366
Have plugged this into the snowball calculator at www.whatsthecost.com. On Just this bit you would pay about 25k in interest. Debt free date November 2022.
Optional payment insurance of £86.20You could get payment protection for less than this. Also if your employment is in any way unusual then you almost certainl won't be covered.

Unsecured loan
Whoever Payment per month £106.

Offer 2
Provider - Firstplus
Amount £48 000
APR – 6.2% variable
Term of loan 10 years
Payment per month £560
With this one you would pay a minimum of £16527 if the rate stayed at this for the life of the loan. Debt free date 2017

BUT I would seriously not do this. Do you really think that once you have paid off the credit cards you will have the strength to cut them up and cancel the accounts? BOTH of you? With all due respect you have run up this debt by living beyond you means. Are you sure that you won't be tempted to just put x on and then y happens so that goes on the card too etc?

My credit rating appears to be good. If the Experion service actually worked that I pay £50 a year for I could actually tell. But for 3 days they have not been able to provide a statement.
If your rating is still good, then you should be able to get low life of balance cards to at least transfer the most expensive credit cards onto. That way you are paying off more capital than interest.

I am worried about using FirstPlus as they don’t seem to have a good reputation and the rate is variable. Trawling through the message boards it looks like they like to reel you in with a low rate then increase it as required.And from reading through the boards they are right pains if you have a problem too. I think that there is enough slack in your budget that you could repay this MUCH quicker than either of the two scenarios above, and therefore save a fortune in interest.


Current Debts
Total Loans 90,209



Income
My Salary £4533
Wife Salary £1700
Child Benefit £102
Total Income £6335This is an excellent income, and will provide you with lots of scope to pay down these debts.


Expenses - Pre Consolidation
Life Insurance £49.4What is this for? Is it for both of you? If not then I am sure you can get this cheaper.
Mobile Phone 1 £49.09You mentioned that you can't switch providers, BUT you can ask your current provider to switch you to the tariff that most suits your usage, or if you can keep calls down, then switch to a lower tariff.
Halifax Credit Card £145.49 Interest Rate 5.5%
Unit Trust Purchase- Kids Saving Acc £110Unless there are penalties for doing so, then stop this for now. Unless you are guaranteed to get 20% (your highest apr) interest, you are saving for the children, by borrowing at a higher rate on a card in effect.
life Insurance £35.57 Ah so this is another one. Can you combine the two to get a cheaper deal
Sky Digital £48I would go freeview. You can get the free to air channels via you sky box. Or else phone them up and threaten to cancel, they might give you a cheap deal to keep you. If you don't ask you don't get and all that.
Water £34
TV licence £12
Electricity £138Even if you are an electricity only house, this is very high. If the temp thermostat is higher than 21 degrees, the turning it down would save you a lot. Same for the water temperature too. Also turning things off not leaving them on standby. Eg tv uses almost as much electricity when on standby as it does when properly on.
Northern Rock – Loan £167.6 Interest Rate 10%
Council Tax £222You can ask to pay this over 12 months not 10. Also you can check you council tax banding to see if you are in the wrong one. There is an article about this on the main site.
Abbey - Mortgage £1702
Wife Credit Card Barclays £82 Inter Rate 20%Is your wifes credit record good too? I am sure, if so that she could get an LOB card for less than this. Or again phone up and say you are thinking of switching, they might give you a deal to keep you.
My Barclay Card £78 Interest Rate 19.9%ditto the above.
Morgan Stanley Credit cared £73 Int Rate 0% 9int free till Sept 208)It would be very silly if you were going to consolidate these debts to do so with one that is interest free as you aren't paying anything other than the capital of it ?
Egg Card £125 Int Rate 16.9%
Mobile phone 2 £50as above
MBNA - £282 Int Rate 17.5%
Egg Loan £350 Int Rate 7.66%
Smile Credit Card £228 Int Rate 18%
Train Travel £120
Groceries, Clothing, Household Expenses £1300:eek: Oh boy! As others have mentioned, this is very high. I feed 2 adults, 2 children and 2 cats on £250 -£300 a months. And that is using a traditional butcher for my meat (more expensive but better quality = less waste). Some tips for cutting this. Do a shop, then put the receipt on the frigde. Circle everything that goes in the bin. Work out how much this wastage costs. This will focus yourselves on what is bought out of habit (but doesn't get eaten). Next stage is to challenge yourselves to buy only veggies, milk, fruit and bread for as long as possible and make meals from what you have in the freezer/cupboards. This makes for interesting recipes and frees up space.

If you have regularly been spending say £100 each on yourself OH and children, then do you really NEED any more? Or is it comfort/treat spending? Ie I work hard I deserve this. How about I work hard I deserve to pay more off my debts instead:D !

What are household expenses?
Petrol £200
Child Minder/Carer £450
Cleaner £80get fit and do this yourself. Or cut to bi weekly.
Telephone £75Check you can't get a bundled package that is cheaper. Also there are prefix numbers you can use that mean calls are pennies. Again there is an article about cutting phone costs on the main site.
Total Expenses £6206.15



Excess £128.85Well done at least this is positive! But is it there to throw at your debts at the end of the month? If not then both you and OH need to start spending diaries to track where this money goes.


I have not included holidays, car insurance and home insurance in here As I get an annual bonus of about £20 000 (gross) which I use to pay in a lump sum once a year.You mentioned that this is 12k net. You could spend £1000 on a nice holiday plust £1000 on insurances and have enough left over to nearly pay of say the loan in one hit. Worth a thought next year.

I believe that if you really look there is easily £500 you could save in you outgoings (eg if you saved this off the grocery etc category, this would still leave you £800, an enormous amount still), which would knock some of your debts on the head in a couple of months.

Any ideas and is there salvation?

Yes there is, BUT you have to want to work at it. Do you? Consolidation is the EASY but not the CHEAP way out of this. Especially if the accounts you clear are not closed, and if the lifestyle does not start to keep pace with your salary.

Good luck
chev

[FONT=&quot]Thanks[/FONT]

chevalier

bump for the evening crew

chevalier

Hi there LJ any news? What did you decide?
chev