It’s time to tackle this mountain

Woodsey10

Hello to everyone, 

I’ve been reading through a lot of the posts and can see the forum is a really great place to seek advice and get help navigating debt solutions.
I came back here to look for info or views on a debt consolidation loan. I was close to going ahead with one but thought it best to research first. 

I’ve been in heavy debt since the end of 2016 and I’m no closer to burning it down. I only recently totalled up what I’m paying each month and the figure was higher than I realised, hence looking into the consolidation loan. I need to take responsible control of my finances and start somewhere, so here I am. 

I’ve seen that it’s worth doing a SOA and will get this done. Also seen a lot of posts on DMP’s which might suit me depending on how my situations assessed. 

I haven’t seen much talk around mortgages with a DMP. The one thing I’ve stuck to is that I’ve never wanted my bad decisions with debt to affect the home I share with wife and daughter. The reason I considered the consolidation is that it wouldn’t affect my credit score and therefore not affect our remortgage at the end of 5 yr fix. This ends Jan 2026.

Can anyone explain what situation I’d be looking at if I was on a DMP and it’s time to renew mortgage deal? Would I just allow it to switch to their standard variable rate? 

Thanks for reading. 
 

RAS

As a rule, you just go to your provider's website, choose the best option they offer and transfer to that, without a credit check. So it depends a bit what your current provider is like? Do the offer main-stream deals or are they a lender of last resort?

Woodsey10

Provider is Santander and to be fair we did that last time and switched at end of two year fixed to current 5 yr fixed. It was a good deal at 1.64%. We were lucky to switch during the low rates in early 2021.

EssexHebridean

Santander is one that people often reference on here as having decent options when deals finish and credit history won't allow for shopping around.

As for a consolidation loan "not affecting your credit score" - what it does to your "score" is irrelevant as only you see the made up number provided by the CRAs. It would affect your credit file though.

The main thing about consolidation is that it very rarely works as intended. the first thing is to get all your financial ducks in a row - the fact that you have been surprised by how much you are currently paying back suggests that for you, the first step here is to get a proper solid budget in place - completing the SOA will help you to do this. 

Woodsey10

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 1

Number of cars owned.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 2560

Partners monthly income after tax....... 1850

Benefits................................ 87.2

Other income............................ 0[b]

Total monthly income.................... 4497.2[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 980

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 202

Electricity............................. 137

Gas..................................... 0

Oil..................................... 0

Water rates............................. 29.9

Telephone (land line)................... 0

Mobile phone............................ 35

TV Licence.............................. 12.47

Satellite/Cable TV...................... 45

Internet Services....................... 0

Groceries etc. ......................... 300

Clothing................................ 25

Petrol/diesel........................... 360

Road tax................................ 39.8

Car Insurance........................... 55.62

Car maintenance (including MOT)......... 40

Car parking............................. 5

Other travel............................ 15

Childcare/nursery....................... 156

Other child related expenses............ 10

Medical (prescriptions, dentist etc).... 25

Pet insurance/vet bills................. 55

Buildings insurance..................... 12

Contents insurance...................... 0

Life assurance ......................... 34.41

Other insurance......................... 4.5

Presents (birthday, christmas etc)...... 40

Haircuts................................ 0

Entertainment........................... 15

Holiday................................. 100

Emergency fund.......................... 100

Child Savings account .................. 60

Wage switch weekly to monthly .......... 120[b]

Total monthly expenses.................. 3013.7[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 470000

Shares and bonds........................ 0

Car(s).................................. 21000

Other assets............................ 2000[b]

Total Assets............................ 493000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 223765...(980)......1.64[b]

Total secured & HP debts...... 223765....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Mbna c/card (wife).............2612.8....46........0

H/fax c/card (wife)............4590.72...67........0

Family loan int. free..........10000.....0.........0

Virgin Phone...................324.......18........0

Lendable loan..................1030......35.4......0

Betterborrow loan..............4439......114.3.....0

Novuna Loan....................4632......136.......0

Novuna Loan....................4900......114.......0

Novuna loan....................5010......99........0

Novuna loan....................7185......122.......0

Zopa loan......................9604......210.......0

Mbna c/card....................2704.28...60........0

Barclaycard....................563.......80........0

Newday int.free................1014......27........0

Mbna c/card....................2243.63...64.52.....0

NatWest c/card.................4342......43........0[b]

Total unsecured debts..........65194.43..1236.22...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 4,497.2

Expenses (including HP & secured debts). 3,013.7

Available for debt repayments........... 1,483.5

Monthly UNsecured debt repayments....... 1,236.22[b]

Amount left after debt repayments....... 247.28[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 493,000

Total HP & Secured debt................. -223,765

Total Unsecured debt.................... -65,194.43[b]

Net Assets.............................. 204,040.57[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Woodsey10

There it is, it makes for some painful reading. I can’t believe I’ve let it get this bad. It has to stop now. When I think of what we could do as a family with the over 1k per month going to paying debt. 

Debt has been heavy on my mind for approx 5.5 yrs. I’ve contemplated suicide to stop the depressive state of being in so much debt. Had i not had my daughter coupled with life insurance not covering them if I did, I know I wouldn’t be here now. This all stemmed from our wedding of Aug 2016 and the strain and breakdown of relationships associated with it. 

I look forward to your thoughts and advice on what path to take to a debt free life.

Thanks in advance! 

Woodsey10

Just to add. 

We have 2 vehicles but are going to trial having one in around 2 months. As I work nights now and use the family car and not my van. 

Value approx 4.5k
Monthly expenditure tax/ins  £51.00

TheAble

It would be worth updating the debts with the APR on each.

Can you expand a bit on how/why these were run up? You otherwise look to have a healthy surplus income to expenses.

13thlegion

Well done on taking the first steps.

I'll echo updating the SOA with interest rates. I'm also going to question the accuracy of the SOA as you are showing saving 100 a month each for emergency and holiday, and 40 a month presents. And yet have zero cash assets. So unless you've recently emptied those savings for an emergency, a holiday, and a birthday (and only plan on spending £240 for Christmas assuming no birthdays before then) I don't think things add up.

Consolidation loans are often a terrible idea as they do not solve the root cause of the debts.

Floss

Could I ask what the £2k of other assets is? And no contents insurance?

Woodsey10

TheAble said:

It would be worth updating the debts with the APR on each.

Can you expand a bit on how/why these were run up? You otherwise look to have a healthy surplus income to expenses.

Will update the APR’s, wasn’t sure if they were important to show. The majority is gambling debt. Being honest I relapsed a handful of times since late 2016. Haven’t gambled for almost a year now.