I need help!

tootst

Thanks everyone. I’ve cancelled the consolidation loan. They were not very happy about it, and tried very hard to change my mind but I’m happy with my decision not to borrow more.

im going to look at my budget in more detail and see what I can save. I’ve been burying my head in the sand for too long and I know I need to get it together. I managed to pay £6.5k recently towards my CC debt from a bonus so that’s helped.

I’ve reduced my G&E in a new package, I’m still in contract for TV, broadband etc so will review that. Going to cancel my subscriptions too. I’ve also bought contents. But still that’s given me an extra £45 per month.

one thing I have been looking at via StepChange is a DAS/DPP. The way they’ve calculated is that I’d have £800 to pay to debts so I could clear it in 3.5 years. Does anyone have an opinion on this? I’m not sure if I should do this or try to manage as I am, make saving ms where possible and put them to my debts.
***EDIT*** is it an option to write to my creditors and ask them to freeze interest on my accounts? If so, does anyone have any experience, opinion on how likely this is?

Any advice or personal experience would be gratefully received.

thanks so much

ryanm8655

I think you’ve had some solid advice.

Well done on cancelling the consolidation loan. I was here years ago bemoaning the people telling me not to do that. It was lower interest so made sense to me. A few years later I was back with double the debt (check my post history, it’s true).

My lightbulb moment only really came when the credit lines started to run out.

My starting debt and income are quite similar to yours (other than the car), albeit you have higher expenses. Personally I don’t think you need a DMP, just discipline. I’d imagine you’ll be struggling to get any new offers at the moment (I was) but as soon as you start making a dent in the debt you’ll start getting offers again. Once it starts shifting to 0% then things become easier. Persevere would be my advice. You’ve had some great advice on how to slim down your monthly spending.

Personally I’d target the very account first, that’s horrendously high interest. The annual interest is about £2k...but if it’ll motivate you to be clearing and closing down cards then target the smallest balances first, as advised (snowballing).

My approach has been to target highest interest and shift it to 0% as it becomes available.

Where do you live? Another option could be to downsize the rental property, since there are only two of you but moving is expensive itself. This also depends where you live. Are you getting maintenance?

Good luck - with perseverance you could be debt free pretty quickly on your income, especially if getting decent bonuses you can chuck at it.

Andyjflet

Well done, you might want to look at boosting your income too, I have been doing Amazon flex and throwing that money into my fund.
Once these start snowballing and you close down smaller accounts the feeling is great, believe me !

tootst

Thank you for your comments, I already feel like a huge weight has been lifted.

One question I’m still confused on is should I write to my creditors to ask for my interest to be frozen? I think it is an option but I’m not sure if it will damage my credit profile horrendously.

Any thoughts or advice, as always, gratefully received.

thanks

SpoonKat

As Andy says , list debts in order smallest to largest then attack them , paying mins on all apart from the smallest which you throw all spare cash at, can you have a clear out in the house and sell everything you don't need? that will give you a boost to get  you started, get on a written budget and stick to it , you can do this!

Naomim

tootst said:

Thank you for your comments, I already feel like a huge weight has been lifted.

One question I’m still confused on is should I write to my creditors to ask for my interest to be frozen? I think it is an option but I’m not sure if it will damage my credit profile horrendously.

Any thoughts or advice, as always, gratefully received.

thanks

At present may of them are freezing interest due to Covid. I think you can apply online and for many only need to specify covid as a reason. This shouldn't affect your credit rating.  It's worth investigating first.

Good luck

Naomi

fatbelly

Andyjflet said:

So, in this order....pay the minimums on the rest until the first one is paid, then put that £25.84 into the next Visa 8795 and so on. Its called snowballing.

VISA...........................470.......26........25.84
VISA 8795......................1286......40.29.....27.95
VISA 9304......................1701......25........23.9
PAYPAL.........................1800......70........19.9
VISA 6518......................3040......30........23.9
VISA 8577......................3419......104.......27.93
VISA 4061......................4099......124.......27.93
VERY...........................4210......70........54.9

VISA 4280......................4836.39...48........0

VISA 8997......................6161.42...82.69.....19.45

Snowballing works more effectively like this

VERY...........................4210......70........54.9
VISA 8795......................1286......40.29.....27.95
VISA 8577......................3419......104.......27.93
VISA 4061......................4099......124.......27.93
VISA...........................470.......26........25.84
VISA 9304......................1701......25........23.9
VISA 6518......................3040......30........23.9
PAYPAL.........................1800......70........19.9

VISA 8997......................6161.42...82.69.....19.45
VISA 4280......................4836.39...48........0

but obviously the more of these that agree to 0% for a fixed period the better, and  the deals are there for the taking - you just have to ask.

TheAble

fatbelly said:

Andyjflet said:

So, in this order....pay the minimums on the rest until the first one is paid, then put that £25.84 into the next Visa 8795 and so on. Its called snowballing.

VISA...........................470.......26........25.84
VISA 8795......................1286......40.29.....27.95
VISA 9304......................1701......25........23.9
PAYPAL.........................1800......70........19.9
VISA 6518......................3040......30........23.9
VISA 8577......................3419......104.......27.93
VISA 4061......................4099......124.......27.93
VERY...........................4210......70........54.9

VISA 4280......................4836.39...48........0

VISA 8997......................6161.42...82.69.....19.45

Snowballing works more effectively like this

VERY...........................4210......70........54.9
VISA 8795......................1286......40.29.....27.95
VISA 8577......................3419......104.......27.93
VISA 4061......................4099......124.......27.93
VISA...........................470.......26........25.84
VISA 9304......................1701......25........23.9
VISA 6518......................3040......30........23.9
PAYPAL.........................1800......70........19.9

VISA 8997......................6161.42...82.69.....19.45
VISA 4280......................4836.39...48........0

but obviously the more of these that agree to 0% for a fixed period the better, and  the deals are there for the taking - you just have to ask.

Yes and no. Clearly you'd pay less interest in this way - but if interest was the issue here then none of these debts would have been racked up in the first place. It's a behavioural/psychological problem, and you don't solve such problems with "maths" solutions. Paying off the debts smallest first can be more motivational as when each card is cleared and closed it gives a feeling of progress.

ryanm8655

TheAble said:

fatbelly said:

Andyjflet said:

So, in this order....pay the minimums on the rest until the first one is paid, then put that £25.84 into the next Visa 8795 and so on. Its called snowballing.

VISA...........................470.......26........25.84
VISA 8795......................1286......40.29.....27.95
VISA 9304......................1701......25........23.9
PAYPAL.........................1800......70........19.9
VISA 6518......................3040......30........23.9
VISA 8577......................3419......104.......27.93
VISA 4061......................4099......124.......27.93
VERY...........................4210......70........54.9

VISA 4280......................4836.39...48........0

VISA 8997......................6161.42...82.69.....19.45

Snowballing works more effectively like this

VERY...........................4210......70........54.9
VISA 8795......................1286......40.29.....27.95
VISA 8577......................3419......104.......27.93
VISA 4061......................4099......124.......27.93
VISA...........................470.......26........25.84
VISA 9304......................1701......25........23.9
VISA 6518......................3040......30........23.9
PAYPAL.........................1800......70........19.9

VISA 8997......................6161.42...82.69.....19.45
VISA 4280......................4836.39...48........0

but obviously the more of these that agree to 0% for a fixed period the better, and  the deals are there for the taking - you just have to ask.

Yes and no. Clearly you'd pay less interest in this way - but if interest was the issue here then none of these debts would have been racked up in the first place. It's a behavioural/psychological problem, and you don't solve such problems with "maths" solutions. Paying off the debts smallest first can be more motivational as when each card is cleared and closed it gives a feeling of progress.

There are merits to both I think. But logically, paying the highest interest first makes sense plus the debt will go more quickly (provided this approach doesn’t impact motivation).

This is the reason I’ve used my total
debt figure as a KPI rather than the number of debts. Setting myself mini goals along the way based on what I can afford. Looking at the total
figure is daunting but it’s also a reality check. For years I had no idea what my debt figure was...it turned out to be a lot more than I thought. I think acknowledging the total and acceptance of that is a big part of a true light bulb moment.

zippygeorgeandben

Fantastic news on cancelling the consolidation loan!  That's a small victory to you and believe me, as the months go on and your debt comes down; that decision will look back at as one of the best decisions you could have made.