About to turn 30 years old and have 60K of debt!!!

TheAble

What will be the monthly repayment on this loan? Have you run the numbers to see if it fits in your budget?

Davehal7

TheAble said:

What will be the monthly repayment on this loan? Have you run the numbers to see if it fits in your budget?

It will be around £275 a month which is no difference than what I'm paying on credit card as minimum payment anyway! 

kimwp

The fact that you are getting significant additional amounts of money each month to what is shown on your SOA, yet are still in 60k debt means you don't have a handle on your finances, so taking a consolidation loan at this point does ring bells for you sinking further into debt.

I would look at trying to save up that 5k balloon payment from that extra money. Then only take a loan for the whole balance if you close the other debt accounts and can be disciplined enough to use any further extras you bring home a month with any spare money to overpay your debts starting from the one with the highest interest. The issue with this route is that you will be tempted to just pay the £275 a month and gradually build up other debt again.

If you just take a loan for the remaining amount of the balloon payment, then you will retain some urgency on paying off the other debts and should pay them off with any spare cash starting from the debt with the highest interest. Then look to see if you get 0% balance transfer offers, which will charge no interest, but still need to be paid by a certain time.

I'm trying not to be judgemental, but I'm slightly in shock that you owe a family member £18k that they need back and you haven't been sending this extra take home pay to them. 

Sea_Shell

Have you been able to get to grips with the how/why you're (back) in debt?

I did ask up thread but can't see that you've said how you got here.  Sorry if I missed it.

If you'd rather keep that private, then that's OK, but have you been able to nail it down and know what now needs to change?

   

enthusiasticsaver

There will still be about £4k left on the Halifax card so you will still have a monthly repayment on that of around £100 as well as the new loan and the soa shows a £200 shortfall as well. I can’t see how you will manage without a mortgage holiday or cutting back somewhere else  and I am very uncomfortable with recommending you prioritise unsecured debt over your mortgage and would recommend if you do it it is for as short a term as possible and any commission you get goes towards paying down the debt and then after to overpaying the mortgage. If you are definitely entering a DMP then save the commission and pay it off the mortgage as once your deal finishes your mortgage repayment will go up and of course a mortgage holiday puts the balance higher. 

I am amazed you managed to get further borrowing and in my book it is irresponsible lending but they won’t know about the family loan so I guess that might be why it was approved. In view of your past difficulties with debt consolidation and then building up the cards again I strongly suggest you stop using cards and close them down as you clear them or you will be on this debt merry go round ad infinitum. 

TheAble

Yes, you're currently £205 short. As ES points out you'll still be paying £100 as a minimum on that Halifax card. Even with the overdraft paid off you're still going to be short overall - in fact even more so: I make it around £250. And coming down the line you're going to have a higher mortgage payment and higher gas/elec bills.

By taking the interest-only mortgage holiday, ok it frees up a bit of money temporarily but what you're effectively doing is paying off non-priority debt instead of your mortgage. 

I'm not really sure what the answer is but taking out yet another loan doesn't feel like a good idea to me.

Floss

Is this loan / mortgage holiday thing just pushing the whole issue down the road for 6 months until you can get a new fix? I'm on a DMP and my home is shared ownership. TSB are quite happy for me to move from my 2.25% 5yr fix to a.n.other fix 3 months before it expires next year, no credit check needed. Why do you feel the need to wait until you have your new mortgage before setting up a DMP?

warby68

If your car is worth £10k and the balloon payment only £5k is there no way of realising that equity by selling the car ?

£5k for the balloon and £5k for another car (or worst case start another cheaper finance deal with lower deposit) so your payments overall are lower?

I'm not sure your light bulb is fully on yet while you are so keen to take on more debt and forbearance concessions which may well only kick the can down the road. I wouldn't mess with the mortgage with your renewal so close to be honest. That sounds judgy but often it does take a while for a truly different way of thought to kick in and you've been maxing debt for a long time. Obviously you have one big advantage which is good earnings but even so, if wife could pull in just one shift somewhere or £50/£100 of online earnings, these would be valuable on top of your wage in your current circumstances.

Davehal7

hat you are getting significant additional amounts of money each month to what is shown on your SOA, yet are still in 60k debt means you don't have a handle on your finances, so taking a consolidation loan at this point does ring bells for you sinking further into debt.

I would look at trying to save up that 5k balloon payment from that extra money. Then only take a loan for the whole balance if you close the other debt accounts and can be disciplined enough to use any further extras you bring home a month with any spare money to overpay your debts starting from the one with the highest interest. The issue with this route is that you will be tempted to just pay the £275 a month and gradually build up other debt again.

If you just take a loan for the remaining amount of the balloon payment, then you will retain some urgency on paying off the other debts and should pay them off with any spare cash starting from the debt with the highest interest. Then look to see if you get 0% balance transfer offers, which will charge no interest, but still need to be paid by a certain time.

I'm trying not to be judgemental, but I'm slightly in shock that you owe a family member £18k that they need back and you haven't been sending this extra take home pay to them. 

Yes I see your POV, there is no way I can conjure up 5k for the balloon before the 1st September, especially with it being summer holidays and having 4 kids at home, This months payslip is also the worse year to date and is bang on 3400 :-( I am determined to be disciplined and dont really have no other option now its the end of the road.

and surely its better me actually paying of my debt with the loan idea rather than just paying minimum payment on CC and interest racking up 

I plan on using any cutbacks, commission and savings from mortgage charter to clear the outstanding CC debts. 

The family member is my mother and the money came from a house sale and while she had a steady income, since then she is bed bound with fibromyalgia. so income has reduced 

There is a formal contract  between us that is based over 10 years and includes a small interest rate, loan was originally for close to 25K and aswell as contribute towards clearing debt it also went towards deposit for house

The agreed £211.63 a month is acceptable to both parties  

Davehal7

Sea_Shell said:

Have you been able to get to grips with the how/why you're (back) in debt?

I did ask up thread but can't see that you've said how you got here.  Sorry if I missed it.

If you'd rather keep that private, then that's OK, but have you been able to nail it down and know what now needs to change?

   

The main root cause was living outside of our means from luxury food shopping to lots of alcohol and cigarettes, then the other things where my car and house deposit , court costs to get custody of Wife child from previous relationship 

So some things have changed and others were just the way it is, further improvements would be to budget better for food and remove alcohol altogether