Going Debt Free With Salary Finance

dieselv2

Here we go on the journey to being debt free and being more senible with money.  I previously had a salary finance loan of £3,000 to buy a new car and that has finished and they asked if wanted another...

At same time my fluid card wanted £115 minimum payment for hitting £3,000 (active) with the APR at an eye watering 49.9% but between me and the wife debts looking towards £16,000.  I even worked out our payments....

Must Haves £623

Like to have £127

Overpayments/Min Payments:£407.55

So after some discussions we decided to reapply for a salary finance loan.  They came back saying I was guaranteed a loan of between £2,000 and £11,700.  The APR is 19.9% however this is nowhere near the APR that Studio and Fluid are offering.  I have just took the £11,000 and it was deposited instantly.  I have paid off so far my active accounts and I am sending full and final requests to the creditors that have accounts which are defaulted (letters ready for the post tomorrow).  I pay loan back over 3 years out of my 4-weekly wage but those repayments will be less than the figure above (£407.55).

This will also allow me to set money aside for trips, meals out, etc.

I already feel like a huge weight has been lifted

sonyarita

Hi Diesel, it must feel good to be rid of interest rates of 49.9%....ouch! At those rates it can become a never ending battle to clear them.

Do you have a plan so that you don't go back to using credit?  Just asking ( not to be negative) as I have consolidated several times in the past but never changed my spending habits, ended up defaulting on everything near enough.

dieselv2

We are going to do 1 big shop with a max of £100 and then set ourselves a target of £25 per week for dailys such as school packed lunches, bread, milk, etc.  I know benefit calculator says it should be close to £400 we should spend, but my doing meals plan and structuring in a way we can get extras from food.  ie. If we have a roast of Saturday, the wife & I can use chicken or beef as butties on the Sunday and take out own dinners instead of the supermarket meal deals.  We could also structure meals to get 2 days out of a bag of salad rather than throwing it away and buying new bag a few days later.  We need to be a lot smarter around this.

My wife will go out shopping for 1 item and come back with 10 but she's trying so hard not to and has done it for a week now.  It's killing her though haha.

The big credit cards will be cut up and accounts closed as too easy when everything is autosaved on the computer and phone.  Remove all those tempations. This may not be to the agreement of everyone but I'm going to keep lowest APR credit card active just incase of a big emergency.

I can't default on this payment as comes out before I get my work pay.

foxgloves

You are quite right to invest time & effort in weekly meal planning in tandem with smart shopping lists. There is definitely money to be saved here. Back when we were first debt busting, we worked out that we saved a shocking £2k a year just by taking packed lunches to work instead of doing the sandwich run every day. Another big saving for us was to knock top-up shops on the head. As you have identified, calling into a supermarket for a couple of essential items midweek is a budget-killer..... how many times have we gone in for milk & come out £20 lighter? So we now put a bit more time into writing our shopping list so that it reflects what we need to cover a week's worth of breakfasts, lunches & dinners. I also spend a lot more time checking properly what we've got in at home. I crossed carrots, coffee & washing-up liquid straight off this week's list, because when I double-checked, we had plenty. Not a huge saving but over a year, it all adds up.
Agree about avoiding food waste. You wouldn't rip up £10 notes & throw them in the bin, but that is what's happening with surplus food. It can be avoided by better planning & not over-buying.
I think you will find you can make some good savings here.
F

dieselv2

Letters posted to 3 DCA's in relation to 7 debts today so they should get them Tuesday. How long do they usually take (Lowell, PRA & Moorcroft)?

Writing daily spends on a calendar to see if visual impact will help achieve budgets easier.

dieselv2

PRA Group got in touch today on a £3,353.78 debt and offered £2,200 as Full and Final payment.  I've sent over my acceptance of the figure so once that's paid, down to £7,121.57 left.

I sent Moorcroft a new expendifutre sheet which they wanted before offering a F&F and filled out Cabot's settlement form so we'll see were we go from here

enthusiasticsaver

Whilst I think you have a plan of sorts I think it is important that you do not imagine that by moving the cards to a salary finance loan this means you are paying down the debt otherwise when that current debt figure in your signature  is almost 0 you may be tempted to think you are debt free. This is the danger of debt consolidation although I am glad to see you are cutting up most of the cards. How much is to be deducted from your salary each month? Good result on PRA. 

dieselv2

£371 comes out for salary finance and although that's very eye watering, in realistic terms I've just shifted debt around but taking a lot of it from a high interest rate to a low interest rate.

I know it's easy to see the figures dropping and go w00p, I'm free of debt!!!!  But in reality that debt is with me for 3 years.  I'm just paying it off quicker than how it is now.  If I was paying PRA Group every month it'd take me 37 years to pay off haha.

I've just terminated another card, ASDA Credit Card which wasn't defaulted but needs to go.

elche2024

Hi. I'm considering doing something similar. Am on a DMP and my employer does salary finance which I'm thinking may enable me to offer my creditors full an finals and get off the DMP. The only problem is my credit rating is "very poor" due to 6 missed payments last year which weren't actually missed but recorded as such by capital one when I went onto the DMP. Does anybody know what the likelihood of me being able to get approved by salary finance might be?

elche2024

For reference my credit score is 495 with trans union which is apparently the reference agency Salary Finance use