Dept help request

Dippygoose

I’m looking for a little advice I’m autistic and not too good with money.
I recently took out a credit card and got £1600 out of hand with it but it’s interest free until August next year .

I also have a loan with £6200 left to pay over 3years at 2.7% .

I’m paying them the £25 minimum on the credit card plus saving £100 a month,I’ve self blocked the card and paying £160 on the loan .

This is what I’m trying to work out is freeing up monthly money vs total debt If I take a consolidation loan over 5 years I could save £125 a month but pay more interest in total .

But I’ve got £500 in a 4.58%(AER) savings account and £1800 due to pay out next June in a government universal credit help to save scheme.

I was £19000 in debt which is down to £7800.
I have no family or anyone to ask for advice and live alone.
can I have your advice please I might be just over keen to pay it off.

Martico

You've done so well to bring your debt down by so much, and look to be very much on the right track. Your two remaining debts are at low (or zero) interest rates, and you have them covered.

On the credit card, you can keep paying the minimum until July next year, keep saving the extra £100 per month into your easy access savings account, and then in July, make a payment from your savings for the final balance.

On the loan, the interest rate is also lower than your savings account, so keep paying the monthly amount due, and you'll pay that down within its term.

On the face of it, you're on the right track and in a good place

EssexHebridean

That’s an amazing reduction in debt - well done!

as a rule consolidation doesn’t work well for most people. This is partly because it gives the illusion of “fixing the problem” when in fact often all it does is extend the problem. It doesn’t change the habits which often were the causes of the debt in the first place, and frequently people find that they then run up separate debts to the consolidation loan and end up in a worse place than they started. Personally I would suggest you dismiss the consolidation idea right now. 

What was the loan originally for? Was this for a one off necessary home improvement project, for example, or for things that should have really been saved up for like holidays etc? By the sound of it the credit card was either used for general living expenses and not paid off, or was used for buying “stuff” that agin, meets the description of “should have been saved for” - is that a fair assumption? 

I’d suggest it might be useful to you to put together your SOA (statement of affairs) and post that in to this thread. The regulars here will then look over your regular spending and budgeting, and see where you might be able to make savings that you have missed, or indeed spot habits that you could make a big financial gain by changing. You say you “aren’t very good with money” so why not start working now to change that into “I’m very good with money” instead? 

In terms of paying off - the ideal would be to continue doing what you are doing with the loan - that is designed to be cleared by the time you reach the end of it anyway, and the more important thing right now is to tackle the CC. On the CC the thing to target is clearing that balance by the time the 0% ends. The SOA will help with establishing whether there is any additional money you can divert to that, although so long as you trust yourself not to spend on the card again, the best way of doing this will indeed be to send the money to your savings then use the balance to clear the card next summer. 

BikingBud

Dippygoose said:

I’m looking for a little advice I’m autistic and not too good with money.
I recently took out a credit card and got £1600 out of hand with it but it’s interest free until August next year .

I also have a loan with £6200 left to pay over 3years at 2.7% .

I’m paying them the £25 minimum on the credit card plus saving £100 a month,I’ve self blocked the card and paying £160 on the loan .

This is what I’m trying to work out is freeing up monthly money vs total debt If I take a consolidation loan over 5 years I could save £125 a month but pay more interest in total .

But I’ve got £500 in a 4.58%(AER) savings account and £1800 due to pay out next June in a government universal credit help to save scheme.

I was £19000 in debt which is down to £7800.
I have no family or anyone to ask for advice and live alone.
can I have your advice please I might be just over keen to pay it off.

You've got this nailed, do not go near paying more interest in total!

As I see it you have excess that can be saved at rates higher than your debt, keep exploiting this, building your worth with interest in you favour and ensure you keep servicing your debt.

fatbelly

Dippygoose said:

I’m looking for a little advice I’m autistic and not too good with money.
I recently took out a credit card and got £1600 out of hand with it but it’s interest free until August next year .

I also have a loan with £6200 left to pay over 3years at 2.7% .

I’m paying them the £25 minimum on the credit card plus saving £100 a month,I’ve self blocked the card and paying £160 on the loan .

This is what I’m trying to work out is freeing up monthly money vs total debt If I take a consolidation loan over 5 years I could save £125 a month but pay more interest in total .

But I’ve got £500 in a 4.58%(AER) savings account and £1800 due to pay out next June in a government universal credit help to save scheme.

I was £19000 in debt which is down to £7800.
I have no family or anyone to ask for advice and live alone.
can I have your advice please I might be just over keen to pay it off.

I would carry on with what you are doing and not think about a consolidation loan.

Your credit card is 0% till Aug and the loan is at a really low interest rate.

By next August you should have enough to pay off the credit card and you can just let the loan run, providing you can meet the monthly instalment.

Post again if you have questions

Ps. Are you still with Octopus for your energy? Their fixed deal is quite good. I just switched and they lowered the d/d by £10

Dippygoose

fatbelly said: 

Dippygoose said:

I’m looking for a little advice I’m autistic and not too good with money.
I recently took out a credit card and got £1600 out of hand with it but it’s interest free until August next year .

I also have a loan with £6200 left to pay over 3years at 2.7% .

I’m paying them the £25 minimum on the credit card plus saving £100 a month,I’ve self blocked the card and paying £160 on the loan .

This is what I’m trying to work out is freeing up monthly money vs total debt If I take a consolidation loan over 5 years I could save £125 a month but pay more interest in total .

But I’ve got £500 in a 4.58%(AER) savings account and £1800 due to pay out next June in a government universal credit help to save scheme.

I was £19000 in debt which is down to £7800.
I have no family or anyone to ask for advice and live alone.
can I have your advice please I might be just over keen to pay it off.

I would carry on with what you are doing and not think about a consolidation loan.

Your credit card is 0% till Aug and the loan is at a really low interest rate.

By next August you should have enough to pay off the credit card and you can just let the loan run, providing you can meet the monthly instalment.

Post again if you have questions

Ps. Are you still with Octopus for your energy? Their fixed deal is quite good. I just switched and they lowered the d/d by £10

yes, I’m still with octopus.

EssexHebridean

Check the Octopus fix carefully if considering it - rumour has it that the rates may have increased now.