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meerkatpie

MidsHollie said:

meerkatpie said:

MidsHollie said:

Hi there, 
Have you considered selling your car? That is a hell of a lot of car loan, and if you downgraded in car for a while you could smash out your debts pretty quickly and then rack up your deposit quickly too. Then when you are in your beautiful home you can then save up for a car. 

I’m also a big advocate on 100% focused on one thing. It seems like you are directing most of your focus on the tesco loan, which is great, but I would also stop your savings for now. The more you can put towards the debt the quicker it will be gone and then you can totally focus on saving for your deposit

@MidsHollie
I wish I could, but I made the mistake of going for a PCP, bad in hindsight, it would have been cheaper for me to get an old banger for a couple of hundred just to get around with but I wasn't that sensible  

On the plus of that it is 0%, so I don't have to worry about any interest stacking up

But I think it might be one that I just have to stick out until it is over 

Oh !!!!!!! Wel, on the plus side, that is a lesson you have learnt early on, and a mistake I’m sure you won’t make again!! 

Does that mean it has a balloon payment at the end to keep the car? Is the debt you stated with the balloon payment? I think that most PCP contracts have a break clause, where half way through you can voluntarily terminate the contract. You’d be without a car but you could then use your savings to get a cheap car until the debt is gone. Dave Ramsey, the intense, preachy American debt guy has a lot of callers talk about being “upside down” with cars (owing more than it is worth) and they always really struggle to give up the car, but logically, from a distance it makes sense as it saves them money in the long run. It’s just hard for the person themselves to see it as we spend our whole life conditioned that debt is ok. Anyway, long story short, it might be worth looking in to, so you fully know your options 

@MidsHollie

That is something I definitely won't make the mistake of again! Luckily it is a Toyota, so when I have paid it and I own it, I hope it will run forever!

I had considered it, but I am not too clear with how it impacts your credit in the long run? I wouldn't want to do anything to ruin my chances in the long run. 

Luckily no, the debt I have includes the ballon payment. I have a £4900 payment that will need to be made at the end of the term, but if it gets to that stage and I can't afford it, they said it can be refinanced? Otherwise, I do know from mortgage calculators, my monthly payment does not affect my borrowing amount if I have the car only, so if worst comes to worst, I hope I could juggle a mortgage and a small amount of months to deal with the car, but I think that it would be manageable?

Sarahwithlove

meerkatpie said:

MidsHollie said:

meerkatpie said:

MidsHollie said:

Hi there, 
Have you considered selling your car? That is a hell of a lot of car loan, and if you downgraded in car for a while you could smash out your debts pretty quickly and then rack up your deposit quickly too. Then when you are in your beautiful home you can then save up for a car. 

I’m also a big advocate on 100% focused on one thing. It seems like you are directing most of your focus on the tesco loan, which is great, but I would also stop your savings for now. The more you can put towards the debt the quicker it will be gone and then you can totally focus on saving for your deposit

@MidsHollie
I wish I could, but I made the mistake of going for a PCP, bad in hindsight, it would have been cheaper for me to get an old banger for a couple of hundred just to get around with but I wasn't that sensible  

On the plus of that it is 0%, so I don't have to worry about any interest stacking up

But I think it might be one that I just have to stick out until it is over 

Oh !!!!!!! Wel, on the plus side, that is a lesson you have learnt early on, and a mistake I’m sure you won’t make again!! 

Does that mean it has a balloon payment at the end to keep the car? Is the debt you stated with the balloon payment? I think that most PCP contracts have a break clause, where half way through you can voluntarily terminate the contract. You’d be without a car but you could then use your savings to get a cheap car until the debt is gone. Dave Ramsey, the intense, preachy American debt guy has a lot of callers talk about being “upside down” with cars (owing more than it is worth) and they always really struggle to give up the car, but logically, from a distance it makes sense as it saves them money in the long run. It’s just hard for the person themselves to see it as we spend our whole life conditioned that debt is ok. Anyway, long story short, it might be worth looking in to, so you fully know your options 

@MidsHollie

That is something I definitely won't make the mistake of again! Luckily it is a Toyota, so when I have paid it and I own it, I hope it will run forever!

I had considered it, but I am not too clear with how it impacts your credit in the long run? I wouldn't want to do anything to ruin my chances in the long run. 

Luckily no, the debt I have includes the ballon payment. I have a £4900 payment that will need to be made at the end of the term, but if it gets to that stage and I can't afford it, they said it can be refinanced? Otherwise, I do know from mortgage calculators, my monthly payment does not affect my borrowing amount if I have the car only, so if worst comes to worst, I hope I could juggle a mortgage and a small amount of months to deal with the car, but I think that it would be manageable?

Sorry to correct you here but that's wrong. If you have any kind of loan or finance it does effect the amount you can borrow. I had a similiar issue with mine and by clearing my car finance I could borrow significantly more. Because although you may only have a short amount of time left on the loan they basis your affordibility on the basis you will have the loan for the whole term of your mortgage. Mostly because they assume if you have one now you'd have another in future. So for me I was better off paying my car off and having a smaller deposit to get the mortgage I needed. 

meerkatpie

@Sarahwithlove
I wasn't sure if a money transfer card would be worth it as I am scared I would get to the end and not be able to pay it for the interest... but then again, I would have a balance transfer so it would be much cheaper in the grand scheme with 0% interest! Definitely something to look into. 

I will be honest, I am working every ounce of overtime I get and we do get paid a little extra for it too, but my last set of overtime was stashed separately so Christmas can be paid for without debt.

Otherwise whatever I get will be going towards my debt payments. 

Although, that has definitely pointed me in the right right direction with the LISA. I am going to get that sorted! Thank you!

meerkatpie

Sarahwithlove said:

meerkatpie said:

MidsHollie said:

meerkatpie said:

MidsHollie said:

Hi there, 
Have you considered selling your car? That is a hell of a lot of car loan, and if you downgraded in car for a while you could smash out your debts pretty quickly and then rack up your deposit quickly too. Then when you are in your beautiful home you can then save up for a car. 

I’m also a big advocate on 100% focused on one thing. It seems like you are directing most of your focus on the tesco loan, which is great, but I would also stop your savings for now. The more you can put towards the debt the quicker it will be gone and then you can totally focus on saving for your deposit

@MidsHollie
I wish I could, but I made the mistake of going for a PCP, bad in hindsight, it would have been cheaper for me to get an old banger for a couple of hundred just to get around with but I wasn't that sensible  

On the plus of that it is 0%, so I don't have to worry about any interest stacking up

But I think it might be one that I just have to stick out until it is over 

Oh !!!!!!! Wel, on the plus side, that is a lesson you have learnt early on, and a mistake I’m sure you won’t make again!! 

Does that mean it has a balloon payment at the end to keep the car? Is the debt you stated with the balloon payment? I think that most PCP contracts have a break clause, where half way through you can voluntarily terminate the contract. You’d be without a car but you could then use your savings to get a cheap car until the debt is gone. Dave Ramsey, the intense, preachy American debt guy has a lot of callers talk about being “upside down” with cars (owing more than it is worth) and they always really struggle to give up the car, but logically, from a distance it makes sense as it saves them money in the long run. It’s just hard for the person themselves to see it as we spend our whole life conditioned that debt is ok. Anyway, long story short, it might be worth looking in to, so you fully know your options 

@MidsHollie

That is something I definitely won't make the mistake of again! Luckily it is a Toyota, so when I have paid it and I own it, I hope it will run forever!

I had considered it, but I am not too clear with how it impacts your credit in the long run? I wouldn't want to do anything to ruin my chances in the long run. 

Luckily no, the debt I have includes the ballon payment. I have a £4900 payment that will need to be made at the end of the term, but if it gets to that stage and I can't afford it, they said it can be refinanced? Otherwise, I do know from mortgage calculators, my monthly payment does not affect my borrowing amount if I have the car only, so if worst comes to worst, I hope I could juggle a mortgage and a small amount of months to deal with the car, but I think that it would be manageable?

Sorry to correct you here but that's wrong. If you have any kind of loan or finance it does effect the amount you can borrow. I had a similiar issue with mine and by clearing my car finance I could borrow significantly more. Because although you may only have a short amount of time left on the loan they basis your affordibility on the basis you will have the loan for the whole term of your mortgage. Mostly because they assume if you have one now you'd have another in future. So for me I was better off paying my car off and having a smaller deposit to get the mortgage I needed. 

No need to apologise, that's what we all (and especially me) are here for, I am wanting to learn!

I've based it on the online mortgage calculators, so when it asks if you have any debt I type in my car payment and it stays the same for the amount borrowed whether I enter my car payment or not. 

Does this change when I go through to application then? :O I can imagine when it comes to the actual app they scrutinise more, so it wouldn't surprise me! 

Sarahwithlove

Sounds like you are doing all you can in terms of increasing your income then.
Tbh it would only be worthwhile if you can manage to get 20+ months on it to allow you time to pay it back. Otherwise probably better off just keep overpaying the loan. I'm not 100% savvy when it comes to this stuff and someone else might be able to better advise you. I've always had mine in a 0% card so never been an issue for me. But chances are that you could probably balance transfer it if you can't pay it off to a lower percentage then your loan is. I know alot of people aren't fans of that but I'm all for paying less interest myself. Maybe do an affordability calculator to see if you'd be eligible for anything with a lower interest or 0% and see what comes back. 

Sarahwithlove

meerkatpie said:

Sarahwithlove said:

meerkatpie said:

MidsHollie said:

meerkatpie said:

MidsHollie said:

Hi there, 
Have you considered selling your car? That is a hell of a lot of car loan, and if you downgraded in car for a while you could smash out your debts pretty quickly and then rack up your deposit quickly too. Then when you are in your beautiful home you can then save up for a car. 

I’m also a big advocate on 100% focused on one thing. It seems like you are directing most of your focus on the tesco loan, which is great, but I would also stop your savings for now. The more you can put towards the debt the quicker it will be gone and then you can totally focus on saving for your deposit

@MidsHollie
I wish I could, but I made the mistake of going for a PCP, bad in hindsight, it would have been cheaper for me to get an old banger for a couple of hundred just to get around with but I wasn't that sensible  

On the plus of that it is 0%, so I don't have to worry about any interest stacking up

But I think it might be one that I just have to stick out until it is over 

Oh !!!!!!! Wel, on the plus side, that is a lesson you have learnt early on, and a mistake I’m sure you won’t make again!! 

Does that mean it has a balloon payment at the end to keep the car? Is the debt you stated with the balloon payment? I think that most PCP contracts have a break clause, where half way through you can voluntarily terminate the contract. You’d be without a car but you could then use your savings to get a cheap car until the debt is gone. Dave Ramsey, the intense, preachy American debt guy has a lot of callers talk about being “upside down” with cars (owing more than it is worth) and they always really struggle to give up the car, but logically, from a distance it makes sense as it saves them money in the long run. It’s just hard for the person themselves to see it as we spend our whole life conditioned that debt is ok. Anyway, long story short, it might be worth looking in to, so you fully know your options 

@MidsHollie

That is something I definitely won't make the mistake of again! Luckily it is a Toyota, so when I have paid it and I own it, I hope it will run forever!

I had considered it, but I am not too clear with how it impacts your credit in the long run? I wouldn't want to do anything to ruin my chances in the long run. 

Luckily no, the debt I have includes the ballon payment. I have a £4900 payment that will need to be made at the end of the term, but if it gets to that stage and I can't afford it, they said it can be refinanced? Otherwise, I do know from mortgage calculators, my monthly payment does not affect my borrowing amount if I have the car only, so if worst comes to worst, I hope I could juggle a mortgage and a small amount of months to deal with the car, but I think that it would be manageable?

Sorry to correct you here but that's wrong. If you have any kind of loan or finance it does effect the amount you can borrow. I had a similiar issue with mine and by clearing my car finance I could borrow significantly more. Because although you may only have a short amount of time left on the loan they basis your affordibility on the basis you will have the loan for the whole term of your mortgage. Mostly because they assume if you have one now you'd have another in future. So for me I was better off paying my car off and having a smaller deposit to get the mortgage I needed. 

No need to apologise, that's what we all (and especially me) are hear for, I am wanting to learn!

I've based it on the online mortgage calculators, so when it asks if you have any debt I type in my car payment and it stays the same for the amount borrowed whether I enter my car payment or not. 

Does this change when I go through to application then? :O I can imagine when it comes to the actual app they scrutinise more, so it wouldn't surprise me! 

I did mine through a broker, I remember I had issues with them offering me the higher amount as it took 2 months to show on my credit score so had to get it in writing from finance company that I owed them no money before they would agree to give me the higher amount. I think with the online calculators they are just estimating what you would be able to get and usually give you a between number rather than an actual. When you go for a mortgage they look at your bank statements for last 6 months so it's always good to live a frugally as possible in build up to applying as well. 

meerkatpie

Sarahwithlove said:

Sounds like you are doing all you can in terms of increasing your income then.
Tbh it would only be worthwhile if you can manage to get 20+ months on it to allow you time to pay it back. Otherwise probably better off just keep overpaying the loan. I'm not 100% savvy when it comes to this stuff and someone else might be able to better advise you. I've always had mine in a 0% card so never been an issue for me. But chances are that you could probably balance transfer it if you can't pay it off to a lower percentage then your loan is. I know alot of people aren't fans of that but I'm all for paying less interest myself. Maybe do an affordability calculator to see if you'd be eligible for anything with a lower interest or 0% and see what comes back. 

I have taken a look, unfortunately there seem to be very limited choice at the moment, which is understandable, on balance, the 0% periods don't seem too amazing to entice me to swap, but I am going to weigh up options on my next day off, as having a balance transfer of a small amount at the end, I think may be better than my loan. 

Although the eligibility calculators come up relatively well for those cards for me, so at least it is an option!

meerkatpie

Sarahwithlove said:

meerkatpie said:

Sarahwithlove said:

meerkatpie said:

MidsHollie said:

meerkatpie said:

MidsHollie said:

Hi there, 
Have you considered selling your car? That is a hell of a lot of car loan, and if you downgraded in car for a while you could smash out your debts pretty quickly and then rack up your deposit quickly too. Then when you are in your beautiful home you can then save up for a car. 

I’m also a big advocate on 100% focused on one thing. It seems like you are directing most of your focus on the tesco loan, which is great, but I would also stop your savings for now. The more you can put towards the debt the quicker it will be gone and then you can totally focus on saving for your deposit

@MidsHollie
I wish I could, but I made the mistake of going for a PCP, bad in hindsight, it would have been cheaper for me to get an old banger for a couple of hundred just to get around with but I wasn't that sensible  

On the plus of that it is 0%, so I don't have to worry about any interest stacking up

But I think it might be one that I just have to stick out until it is over 

Oh !!!!!!! Wel, on the plus side, that is a lesson you have learnt early on, and a mistake I’m sure you won’t make again!! 

Does that mean it has a balloon payment at the end to keep the car? Is the debt you stated with the balloon payment? I think that most PCP contracts have a break clause, where half way through you can voluntarily terminate the contract. You’d be without a car but you could then use your savings to get a cheap car until the debt is gone. Dave Ramsey, the intense, preachy American debt guy has a lot of callers talk about being “upside down” with cars (owing more than it is worth) and they always really struggle to give up the car, but logically, from a distance it makes sense as it saves them money in the long run. It’s just hard for the person themselves to see it as we spend our whole life conditioned that debt is ok. Anyway, long story short, it might be worth looking in to, so you fully know your options 

@MidsHollie

That is something I definitely won't make the mistake of again! Luckily it is a Toyota, so when I have paid it and I own it, I hope it will run forever!

I had considered it, but I am not too clear with how it impacts your credit in the long run? I wouldn't want to do anything to ruin my chances in the long run. 

Luckily no, the debt I have includes the ballon payment. I have a £4900 payment that will need to be made at the end of the term, but if it gets to that stage and I can't afford it, they said it can be refinanced? Otherwise, I do know from mortgage calculators, my monthly payment does not affect my borrowing amount if I have the car only, so if worst comes to worst, I hope I could juggle a mortgage and a small amount of months to deal with the car, but I think that it would be manageable?

Sorry to correct you here but that's wrong. If you have any kind of loan or finance it does effect the amount you can borrow. I had a similiar issue with mine and by clearing my car finance I could borrow significantly more. Because although you may only have a short amount of time left on the loan they basis your affordibility on the basis you will have the loan for the whole term of your mortgage. Mostly because they assume if you have one now you'd have another in future. So for me I was better off paying my car off and having a smaller deposit to get the mortgage I needed. 

No need to apologise, that's what we all (and especially me) are hear for, I am wanting to learn!

I've based it on the online mortgage calculators, so when it asks if you have any debt I type in my car payment and it stays the same for the amount borrowed whether I enter my car payment or not. 

Does this change when I go through to application then? :O I can imagine when it comes to the actual app they scrutinise more, so it wouldn't surprise me! 

I did mine through a broker, I remember I had issues with them offering me the higher amount as it took 2 months to show on my credit score so had to get it in writing from finance company that I owed them no money before they would agree to give me the higher amount. I think with the online calculators they are just estimating what you would be able to get and usually give you a between number rather than an actual. When you go for a mortgage they look at your bank statements for last 6 months so it's always good to live a frugally as possible in build up to applying as well. 

I never though of it from that perspective! I think I will bear that in mind!

Luckily, I am quite tight with my money at the moment, no more takeaways or to-go coffee, so fingers crossed aside from my debt, my spending will be okay! 

But I am determined to see it all paid down, and hopefully the closer I get to that, the better my mortgage chances!

Sarahwithlove

Yeh tbh if you can be debt free your chances of a mortgage will be much better especially as they are getting so much stricter these days over affordability criteria. 

meerkatpie

Sarahwithlove said:

Yeh tbh if you can be debt free your chances of a mortgage will be much better especially as they are getting so much stricter these days over affordability criteria. 

Definitely!

And thank you very much for your previous advice! My emergency fund has £1000 in it, the rest of my savings are now in my LISA which I opened today!

That should be full by January and then I can pay down my debts until the new tax year starts!