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ST88
Posts: 4 Newbie
I am in about £16000 worth of debt (loans and overdrafts) I make a decent wage but I’m struggling to pay more than the minimum payments on everything. I have poor credit rating so don’t know what to do. I would like to be making just 1 payment a month but don’t think I’d get accepted for anything. My mortgage is also up for renewal in April/ May and I’m worried. What should I do?
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ST88 said:I am in about £16000 worth of debt (loans and overdrafts) I make a decent wage but I’m struggling to pay more than the minimum payments on everything. I have poor credit rating so don’t know what to do. I would like to be making just 1 payment a month but don’t think I’d get accepted for anything. My mortgage is also up for renewal in April/ May and I’m worried. What should I do?
Don't worry about the mortgage as you will always get another deal from your existing lender and if you are not yet missing payments on the nonpriority debts then your credit is not going to be as bad as you think. Your score is just a marketing tool and can be ignored.
If you want to explore a new deal you can do this now and lock into a new one up to 6 months ahead. There is no harm in talking to a broker but don't be tempted to add the nonpriority debt to the mortgage. Seriously that would be a bad move.
I think what we need from you is a statement of affairs so that we can better understand your position before we start discussing debt strategies
https://www.lemonfool.co.uk/financecalculators/soa.php
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Agreed, debt consolidation is tempting short-term but routinely ends up with people getting into even debt because they haven't tackled the underlying reason they accrued the first lot.
Go look at your current mortgage provider's current deals. What would the best deal mean in terms of increase?
Then start with an SOA. Look at previous months' statements and your current debts. List the APRs, minimum payments and for the loans the end date. For annual costs like Christmas, add up the spends, then divide by 12.
It would help if you post it here as there are often things missing, and little ways to make money work better.If you've have not made a mistake, you've made nothing0 -
Please ignore the AI generated response OP - it’s not particularly helpful, not least as it suggests consolidation without having any of the vital questions around that aspect answered.(Edit - the post in question has been deleted by the forum team - I will leave my comment in above as a reminder that AI is both against the rules and often very unhelpful on a board such as this where nuance is required)Generally speaking consolidation isn’t a good answer as it just moves the problem, rather than curing it. It also doesn’t change behaviour, and in many cases a change of behaviour and habits is the single most important factor is digging yourself out of a debt hole! The phrase “you can’t borrow your way out of debt” has a lot of truth to it. Consolidation tends to lull people into a false sense of security as it’s designed to feel like you have cleared lots of debt when in fact you’ve just moved it.I would suggest that your first priority here is to put together your SOA (statement of affairs) so you can see where you really stand financially. There is a link in my signature below to one of the calculators we recommend using for this. Once done if you feel comfortable doing so you can use the “format for MSE” option then copy and paste it into this thread and we can take a look and try to spot any savings that might be possible?
Second priority is probably to take a look at what deals are available for your mortgage - starting with what is on offer from your current provider as fatbelly suggests - it may well be that there is a deal you are happy with and as suggested you can lock into that now, you certainly want to start looking now though as you may as well just get that sorry off your mind and know that there are options!Something else you might look at is an eligibility calculator to see if any of your existing debt could be moved to 0% credit cards - thr MSE credit club is useful for this. Anything you can get shifted to 0% interest is a massive help as you can just then set the DD for that to a set figure above the minimum payment and then focus on tackling other higher interest debts for a while. (Destroy thr card or at least stash it away somewhere you won’t be tempted to use it though!)🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her4 -
EssexHebridean said:Please ignore the AI generated response OP - it’s not particularly helpful, not least as it suggests consolidation without having any of the vital questions around that aspect answered.6
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