Dealing with debt

Hello.
I am a single parent.
I work 23 hours per week as a staff nurse. I am increasing my hours in January to 34.5 per week. (I earn too much for Universal credit)
I  have a mortgage that is due to end December and my payments are going up £210 per month.
I have 3 credit cards. 
2 have gone off the 0% deal and both cards are 29.9%. I owe 9k on one and 8k on the other.
The 3rd one is 0% until October 24 which I owe 7.5k on.

I can't increase credit limit on this.

My problem is I can't get a loan or another card to switch the high interest cards onto. My credit score is 980 on experian. I've never defaulted on payments and usually pay more than the minimum. 
When I asked why I'm declined it says it goes on affordability. 
I'm affording to pay 29.9% but they think I can't afford a 6.2% loan which would greatly reduce my monthly payments. 
It's so frustrating. I feel all I'll be paying is the interest. Leaving me with persistent debt.
I've tried credit union, increasing my credit allowance on the 0% so I can do a balance transfer. Personal loans, Secured loans etc. All decline me.
I don't want to go via debt management plans as I don’t want it to affect chances of getting better mortgage rate. 

Any advice? 
«13

Comments

  • Sncjw
    Sncjw Posts: 3,487
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    edited 17 October 2023 at 2:55PM
    Don't get a loan to pay them off. 

    Have you done a statement of affairs so we can see where you could save money to help pay down the CC.

    Alao if you are remortgaging with your current lender they won't do a search and the CC won't affect this..
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • CliveOfIndia
    CliveOfIndia Posts: 1,187
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    Firstly you can ignore your Experian score - it's not used, nor even seen, by any lender.  Lenders will assess you based on the data contained within your credit file, in conjunction with your income and existing debt.
    The problem with consolidation loans are twofold.  Firstly, unless you address the underlying cause of the debt, the danger is that you use a loan to clear the cards then start spending on them again, meaning you're soon in twice the debt you were.
    Secondly, affordability.  A lender cannot force you to use a loan to clear the cards - there's nothing to stop you using it to fund a nice holiday, a flash car or an entertaining day out at Cheltenham racecourse.  So they have to take the view that a loan would be in addition to, not instead of, your existing debt.
    The best first step is to fill out an SOA, use the "Format for MSE" option and paste the results up here.  Other forum users can then take an objective look through and come up with suggestions as to how you could reduce your expenditure, thereby freeing up more money to throw at the debts.  The SOA can be found here: https://www.lemonfool.co.uk/financecalculators/soa.php
    As well as reducing your expenditure, would it be possible to increase your income at all?  I realise it may well be a tough ask if you're a single parent, but a few hours working in a pub or supermarket each week could bring in some valuable extra income, which again will help in paying down the debt.
    But the first step is to do an SOA.  Apart from allowing others to help, seeing it all laid out in black and white can also allow you see where your money is going, and where savings can be made.
    Don't be disheartened. I'm not saying there will be an easy fix, but it's eminently do-able with some determination and discipline.

  • TheAble
    TheAble Posts: 1,586
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    Lenders know that consolidation loans just tend to lead to more debt. You owe £24.5k now but if you're spending more than you earn then inevitably that will only increase if you're given access to more credit.

    As others have suggested post up an SOA so folks can make suggestions as to where you might make some savings.
  • Thank you.  Not sure how to post SOA. It won't let me post link yet. I've really tightened my belt this month and made overpayment on my highest cards. Done extra shifts at work (I'm a nurse) My shifts are 12.5 hours so child care is difficult. I tend to work every weekend when my Ex husband has them. 
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,297
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    You cannot borrow your way out of debt and debt consolidation loans are a classic way of increasing the overall amount.  If you were able to get one at an affordable rate which is unlikely it is more than possible that you build the cards back up again and then you have a loan plus credit cards to deal with.  It is essentially kicking the can down the road so better calling a halt to the debt spiral now while the debt is just £17k.

    You have 2 options.  Cut back on outgoings and increase income and target the most expensive card first. 

    If you are unable to make minimums once your mortgage payment increases you  will have no option but to default and enter a DMP.  That does not mean you  cannot move to a better mortgage deal but you will need to stick with your current lender. 

    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.
    Link to soa: https://www.lemonfool.co.uk/financecalculators/soa.php

    #1 1p savings challenge 2024 £82.56/£671.61
    #1 Save £12k in 2024 £2000/ £12000
  • Thank you so much for your advice. It has given me a lot to think about. I'm just concerned that this month's estimated interest is more than what I was going to pay. It says estimated of £167 on one. Min payment £90. My DD set to £150. 
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,297
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    I presume then that the minimums will go up next month as the 0%  deals finish.  I would do an soa.  There is a link in my signature. 

    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.
    Link to soa: https://www.lemonfool.co.uk/financecalculators/soa.php

    #1 1p savings challenge 2024 £82.56/£671.61
    #1 Save £12k in 2024 £2000/ £12000
  • Seconding what others say - the 980 credit "score" is totally meaningless (and often fluctuates for no logical reason) so don't even think about it. It's the credit history that's more important.
    CC: £0!!!!!! (have paid off £13,000+ over 3 years-ish)

    EF: £1,000/£1,000
    House repairs: £1,000/£2,800 (focusing here for now)
    Building insurance (due Sep 2024): £100/£400
    Safety net savings: £1,500/£3,000 
    Holiday fund: £1,000/£3,000
    Christmas: £500/£500
    Fun pot: £224
    To partner: £3,300/£11,300 (£8,000 to go - but no rush to pay off)
    Extra Student loan: £0/£2,600

    DFD: Finally taking back control after a decade of debt
  • fatbelly
    fatbelly Posts: 20,213
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    Thank you.  Not sure how to post SOA. It won't let me post link yet. I've really tightened my belt this month and made overpayment on my highest cards. Done extra shifts at work (I'm a nurse) My shifts are 12.5 hours so child care is difficult. I tend to work every weekend when my Ex husband has them. 
    You should be able to cut and paste text as long as there is no link in it.

    Now is the time to get the best mortgage deal you can, before you default on the ccs and within 6 months of the old mortgage deal finishing.

    Use a broker if necessary. Honestly that's the thing to focus on atm. Maybe runs things past the guys on the mortgage board. A 5-year fix would be ideal.

    Then work out your strategy for the non-priority debts


  • Thank you. I have used a broker for my mortgage. Unfortunately no one else would lend to me so I had no choice but to go with my current lender. If I stick to the budget rigidly I think I'll have an extra £400 to pay my credit cards. Until mortgage goes up but then my hours will increase permanently anyway.
    Just applied for a water meter. Cancelled everything thats not essential. Don't buy non essentials like alcohol. Don't go out. Living like a nun 🤪.  
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