I can do this...step by step

Sarahwithlove

Debt consolidation isn't usually recommended but I think you've done the right thing especially with the cost of living going up. Payments are more manageable and hopefully you can overpay it and get the time frame down. Id keep up with the overtime all the time you can as you never know when it might stop. 

Rdpncp

Hi,

Thanks both @Humdinger1 and @Sarahwithlove

Just back from a week away with family and managed to keep spend down to a minimum.
No over spend on clearing debts either, but then again I didn't add to the debt.

Missed cut off for overtime pay for end of August pay but only did an extra 5 hours in July.
It will get added to end of Sept with August overtime, which I'm in a better mood to do some now I've had a week off.

I've been double checking with online Apps and phoning Loan companies and I'm just over £35.5k in debt at present.

I'm going to set a target of 02.01.2025 as the aim to be debt clear date which will be 4 years from LBM/post.

I've also put together all my jars of random coins over the house and have £42 in 5p pieces to take to the bank next weekend which I'll then put toward credit card.

I'm slightly torn between what to aim at clearing first.

The big consolidation loan needs to just stay at min payments until all else is gone as its 2.8% interest and huge.

The other Loan is 7.9% and just over 2k remaining.

The credit card is just over 6k but 0% interest for another 26 months.

I think basically I'm going to say the first £50 a month extra goes to credit card as if I don't start over paying it will get to end of interest free and I will be rushing around for a new card transfer.

Everything above that first £50 will be the higher interest Loan. There's 11 payments left on it which I would like to think I can clear by the end of the year (1k will be min payments on it so I need to find 1100 in 4 months...275 a month).

This estimate/plan has me paying a total of £910 a month of debt payments and overpayments. This requires 14 hours overtime per month from now onwards in addition to my regular income and offsetting outgoings.

Will probably not check back in again for a few weeks as I don't feel I always have much to add, but this little ramble I'm writing really helps motivate and focus me.

I also really enjoy reading many other diaries, some I feel I'm getting to know so.e of you really well. One in particular has recently cleated debt which I'm really pleased for, but also a little sad as I really enjoyed reading the diary.

Sarahwithlove

Do you think you will get another 0% balance transfer at end of credit card? If you were to pay minimum on card and focus on the loan. Would you have enough time to clear the credit card after the higher rate loan is gone? 

foxgloves

Do keep at it, @Rdpncp, because I can tell you from personal experience that paying off that final instalment of debt feels amazing. It's like a weight lifting, a long-term financial fug clearing as you try to get used to the fact that all your income is now your own. Yes, we still all have to pay our bills, mortgage, etc, but no longer the debt, which in our case had been around for so very long, we could barely still remember what we'd spent the money on!
So don't give up.....& good luck!
F

Rdpncp

Sigh, so 6 months without a post and not much reading these forums either.

I haven't done much overtime in this period as my mental health has suffered a bit but I am getting back on track now.

Overall, still reducing rather than adding to debt which is positive.

I have just under £32k to go with a small Overdraft which is my first aim to clear and then build an emergency fund as credit card remains 0% interest for another 18 months and loan is fixed at 2.8% so I feel more comfortable with those numbers.

The plan will be to clear Overdraft by end of March and then spend April and May building an emergency fund while also trying to pay an additional £50 per month onto cc.

June onwards will be focusing on continuing an extra cc payment while really working on getting that loan gone.

Seeing some threads I had been following before are now either debt free or very near is really great to read and helping spur myself onwards.

My target is to clear debt (bar mortgage) by October 2025 which is 31 months for £31k. Sounds alot but I've been paying around £750 a month anyway so push in not too much overtime to affect my mental health but to stay positive and achieve that monthly £1k reduction.

Most likely things won't go to plan based off the previous 25 months since LBM have only been £20k reduction but if in the next 25 months I achieve another £20k reduction then I'll be at £11k to go....and would be super happy with that.

Rdpncp

Hello, so I have a question for everyone.

Information ready for my questions.
My mortgage is due to renew interest November 2023 and at present I'm 2.14% at £57k to go.
I have a 0% cc until November 2024 with £5600.
I have a fixed loan of 2.8% with around £25500 remaining.

Two questions:

Question 1.
Option 1.
Do I consolidate all debt onto new mortgage deal which will likely be around £80-85k by time I need to decide at what could be 4-5% interest however all debt in one place with the ability to overpay, possibly by only 10% overpayments per year, though that would be an extra £750 a month so possibly not too achievable anyway.

Or.

Option 2.
Keep everything as it is, clear cc over next year in time for 0% to end and also have Loan at only 2.8%, but higher monthly payments as loan and mortgages will both have min payments. In theory this is the quicker to clean option.


I think most if not all will say option 2, as long as I can afford the min payments which I can even if mortgage jumps to 5.5% then it's only an extra £60 per month to pay.

Question 2.
Assuming I go for option 2 and I can clear cc before 0% interest ends, should I actually be focusing clearing the mortgage before the loan if that has the higher % interest? That actually seems bizarre to me and I'm sure someone will point out how it's not and the loan should go first.

Counting my blessings that I'm now from next month, finally, after a few set backs last few months with unexpected bills, more income than outgoings with ability to slightly reduce debt without doing overtime or extra income routes.

joedenise

Definitely Option 2.  Don't consolidate the loan into the mortgage as you'll be changing unsecured debt to secured debt which is a definite NoNo!

Question 2:  Clear the loan first rather than mortgage overpayments assuming the interest rate is higher.  In fact I'd say you should try to add the CC payments you are making now to the loan payments as an overpayment - assuming you have an Emergency Fund.  If you don't then put the CC payments into an EF first to build that up so that you don't need to use credit again.

Rdpncp

Thank you Joedenise.

I've been reading a lot of forums and posts today and agree option 2 is the safest bet.

I also agree not overpaying a 0% cc when that could go into an emergency fund and can go onto cc closer to end of 0% interest date which is 19 months away.

Also reread my posts on this thread and cannot believe how all over the place I have been at times with planning this debt reduction.

Basically the sensible thing is clear over draft,  build EF, then work on the loan. In 18 months time if EF cannot clear cc then I opt for another 0% cc transfer (hopefully much smaller) while still focusing on the biggest %apr unsecured debt.

Previous posts I had said Jan 2025 (4 years since LBM) to clear debt while trying to aim for October 2024. I still like this target and will keep aiming at it.

Rdpncp

So, resurrection of progress post. 

Its been 21 months since my last post and a lot has happened.

The plan had been to focus on clearing all but mortgage debt by Jan 2025, however some very much unexpected house repairs happened in 2023 to the sum of £27,000.

I have cleared all debt down to 2 remaining loans as of November 2024;
HSBC loan with £6,200 at 5.3% APR and £305 a month repayments
Admiral loan with £18,200 at 2.8% APR and £321 a month repayments 

The Mortgage also ended the lovely low rate we had at 2.7% and is now at 4.9% fixed until November 2028.

I think the reason for my post is purely motivational for myself.

Im still doing a lot of overtime at work which is helping plow the debt down.

The plan is to keep the regular fixes payments of £626 per month onto both loans and a regular saver at 7% fixed for 12 months trying to put the max £300 per month it allows me in and then when it matures in a year, throw it onto, and hopefully clear the HSBC loan.

Then do the same again the following year, with the money thats not going into the then cleared HSBC loan and any extra overtime, and hopefully be able to clear last remaining loan. I know its at a low rate and alot of people will probably say Im better off at 2.8% letting that end on its own, but its 5 years to go and I would love to see no debts. Though I have to admit, as I type this out, Im thinking, overpay mortgage rather than a low rate loan instead.

Currently, overall, Im basically thinking that I have roughly £74k debt including mortgage and Im paying about £1500 a month on these debts and thats 4 years to having no debts whatsoever. Do I think that will happen in 4 years time? No, as more things for the house need to be done, however Im confident within 10 years from now, the house will be fully refurbished and I will have no debt (Also both kids will have been to uni in that time and I plan to cover the tuition fees so they dont have any debts themselves).

Wish me luck

Sarahwithlove

I think you can't go wrong either way you can always wait until the end of the having period and then decide. Or split your overpayments if that helps you feel better about it.