Need cash and credit

FancyClancy

Morning all,

Hope someone can help.

We have £30k of debt looming at us in the face. We are totally aware of it and most of it is in the form of home improvements and needing a new second hand car.

We are both high earners with around 2k per month left after paying bills, mortgage, shopping etc. 

My credit score is brilliant- my husbands isn’t due to a now complete IVA. 

My question is, we need access to around £15k cash to pay trades for labour and materials (family unable to help) and then another £15k to consolidate credit card debts and pay off home improvements. We already have £3k to consolidate on 2 credit cards.

my question is, what’s the best way to do this without having to pay an extortionate amount of interest.

do we
a) use a 0% money transfer card for the £15k cash needed at 14 months and keep moving this to other 0% cards til we’ve paid it off with bonuses etc

also a) for the £15k credit needed, do we get a loan for this over 5years at 5.7% interest

or b) for the £15k credit needed do we use a 0% lending card and again keep moving this at the end of the deal?

We can afford the repayments we just don’t have access to the money right now. I would prefer to be completely debt free after 2 years but appreciate this may not be an option! Am willing to throw as much money at it as possible but also scared will have nothing left over for emergencies and we have two small children.

Thank you so much in advance. There is some urgency around this as the two credit cards are not interest free at the movement so payments are coming up at the end of Jan.

EssexHebridean

FancyClancy said:

Morning all,

Hope someone can help.

We have £30k of debt looming at us in the face. We are totally aware of it and most of it is in the form of home improvements and needing a new second hand car.

We are both high earners with around 2k per month left after paying bills, mortgage, shopping etc. 

My credit score is brilliant- my husbands isn’t due to a now complete IVA. 

My question is, we need access to around £15k cash to pay trades for labour and materials (family unable to help) and then another £15k to consolidate credit card debts and pay off home improvements. We already have £3k to consolidate on 2 credit cards.

my question is, what’s the best way to do this without having to pay an extortionate amount of interest.

do we
a) use a 0% money transfer card for the £15k cash needed at 14 months and keep moving this to other 0% cards til we’ve paid it off with bonuses etc

also a) for the £15k credit needed, do we get a loan for this over 5years at 5.7% interest

or b) for the £15k credit needed do we use a 0% lending card and again keep moving this at the end of the deal?

We can afford the repayments we just don’t have access to the money right now. I would prefer to be completely debt free after 2 years but appreciate this may not be an option! Am willing to throw as much money at it as possible but also scared will have nothing left over for emergencies and we have two small children.

Thank you so much in advance. There is some urgency around this as the two credit cards are not interest free at the movement so payments are coming up at the end of Jan.

Welcome to the forum!

The best way to do it is to accept that you are already in a substantial amount of debt - manageable, yes, but what if "the worst happened" tomorrow? - and to avoid taking on more until that original amount is cleared. 

When will you need the additional £15k? If it will be required spread over several months between now and - say the end of the year, then can you not work out simply paying it from your monthly surplus, which if a real figure, is very substantial indeed? (However, if you currently have £24,000 a year "spare" why do you still have debt AND why do you need to borrow more - surely that "spare" money would be in a savings account? That combined with your mention of your husband having completed an IVA but there being further debt in the household is creating some serious red flags here.

I suspect your first stop here should be a full SOA (Statement of Affairs) to find out where your money is really going and what you are actually spending - and that should be done before you even think about further borrowing. The link for the SOA can be found in my signature.

You mention money for emergencies - do you budget for money to an emergency fund within your monthly outgoings? Are you also now setting aside money for any future replacement car that might be needed?

If you do decide down the line that you want to borrow again, then yes, do so as cheaply as possible, 0% cards might well be the best way. Similarly, rather than any form of consolidation, look at 0% balance transfers for keeping the existing debt on as low interest rates as possible. Consolidation is a slippery slope to finding yourself in a hole that is trickier to dig your way out of! 

Going forwards, think about saving up for home improvements and going ahead with them once you have the money to pay for them - from experience, it is an altogether less stressful way of doing things! 

fatbelly

I agree about the red flags.

Will the local tradespeople accept payment by card? That would be easier.

There are very few money transfer cards now and raising 15k that way may be a stretch.

Also be aware that by 'consolidation' what you mean is 'debt juggling'. Unless your debt is reducing then at some point, you will be unable to obtain further credit and will need a debt solution.

fatbelly

I agree about the red flags.

Will the local tradespeople accept payment by card? That would be easier.

There are very few money transfer cards now and raising 15k that way may be a stretch.Also be aware that by 'consolidation' what you mean is 'debt juggling'.

Unless your debt is reducing then at some point, you will be unable to obtain further credit and will need a debt solution.

FancyClancy

Thank you for taking the time to read my post and comment.
I admit our money budgeting has been extremely poor since we got together. My husbands IVA was taken out without me knowing to cover previous relationships debt which obviously has had some impact on the level of financial trust I have in him hence why am taking the bull by the horns and also taking charge!

We do need to do the home improvements so I think I just need to know the best option for a) getting cash and b) borrowing £15k at either 0% or as low as I can get it. Then of course I will be paying it off as soon as we can and then I will be thinking about setting up savings goals etc.

Man thanks! 

QrizB

FancyClancy said:

We do need to do the home improvements ...

Do you need to do them *now*, though?

If you've got £2k surplus a month, could you delay the improvements until 2027 and bank the £2k pm so you can pay for the improvements without needing to take on debt?

Brie

QrizB said:

FancyClancy said:

We do need to do the home improvements ...

Do you need to do them *now*, though?

If you've got £2k surplus a month, could you delay the improvements until 2027 and bank the £2k pm so you can pay for the improvements without needing to take on debt?

I quite agree with this approach. 

I admit that I've jumped into kitchen renovations with both our current and previous home.  But in each case it was a complete OMG emergency situation.  In both the oven completely died, cupboard doors were falling off and then the fridge stopped working properly.  We could have patched things up but decided (well I did) to rip the whole thing out and start afresh as in the end it would be cheaper than doing it bit by bit.  

So if your situation is like that I completely understand.  But if it's a case of things looking a bit drab and you're too embarrassed to have friends over as a result well, no.  Buy a set of towels that plays up the avocado bathroom porcelain.  Put a fresh brightly coloured splash back behind the cooker to make it all a bit jolly.  And save for a year and then see what needs doing.  Slap a bit of paint on the walls yourself using a youtube video to show you how.

EssexHebridean

Another one who's agreeing with the "step back and take a view" on the home improvements. If the works are - for example - replacing a roof which cannot be repaired further and is leaking, AND replacing a staircase which is dangerous and also cannot be repaired, then yes, you need to do the works urgently - those things are needs. If it's a new kitchen, a new bathroom, or similar, then those are wants, and honestly, they should wait until you have your budgeting AND the debt under control. Analyse things properly - is the stuff you want to get done making the place safe and habitable, or making a house that is already safe and habitable "nicer". Then put yourself in a position where "the worst happens" and you find your income reducing dramatically - would you then be thinking "I wish we'd held off on those works because we'd be in a far better position financially without this £50k of debt" - and yes, I say "£50k" because the estimates you have WILL increase!

Brie says it well - and my view would be if you are concerned about what your friends think of your home, then you probably need new friends, not a new kitchen! 

RedFraggle

Another for "can what needs improving be tarted up".

I updated the kitchen in my flat for £300 including a new to me oven and hob. Painted the tiles, added a splashback and new cupboard handles from eBay.
Same with the bathroom this summer, new taps, toilet flushes and plugholes were £500 fitted for two bathrooms. 

It's so much fresher I'd struggle to justify the cost of replacement. 

Of course if it's essential repairs that's very different 

RedLipstick

I will just say from my own recent experience, as I'm paying off some reno debt I took on a 0% CC in November.

How confident are you that you only need that amount of money?

Just throwing it in here, as my itemised reno plans for 2025 supposed to cost £16k, which ended up being over £25k. You may just as well needing double the money depending how things go and unfortunately it adds up very quickly, so may I suggest you maybe add at min 25% buffer to your calculations.

I know £2k spare will sound a lot to most, but I'd also add maybe it's worth doing a wee budget with your partner, you may have a leak somewhere if you've got two high earners with only £2k left per month after expenses? (edit: just seen you have children so that may explain! )

Also research if you can get high enough limit on your CC/loan to cover all this, but can confidently say 0% cc worked well for me. Maybe consider a longer term loan though if you don't think 14 months is enough time to pay off £15k with £2k spare. Personally I wouldn't risk it though with your existing high debt. Good luck!

tigergambit

FancyClancy said:

Morning all,

Hope someone can help.

We have £30k of debt looming at us in the face. We are totally aware of it and most of it is in the form of home improvements and needing a new second hand car.

We are both high earners with around 2k per month left after paying bills, mortgage, shopping etc. 

My credit score is brilliant- my husbands isn’t due to a now complete IVA. 

My question is, we need access to around £15k cash to pay trades for labour and materials (family unable to help) and then another £15k to consolidate credit card debts and pay off home improvements. We already have £3k to consolidate on 2 credit cards.

my question is, what’s the best way to do this without having to pay an extortionate amount of interest.

do we
a) use a 0% money transfer card for the £15k cash needed at 14 months and keep moving this to other 0% cards til we’ve paid it off with bonuses etc

also a) for the £15k credit needed, do we get a loan for this over 5years at 5.7% interest

or b) for the £15k credit needed do we use a 0% lending card and again keep moving this at the end of the deal?

We can afford the repayments we just don’t have access to the money right now. I would prefer to be completely debt free after 2 years but appreciate this may not be an option! Am willing to throw as much money at it as possible but also scared will have nothing left over for emergencies and we have two small children.

Thank you so much in advance. There is some urgency around this as the two credit cards are not interest free at the movement so payments are coming up at the end of Jan.

Take your time with the renovations if possible - what do they entail? Have a look on FB marketplace if they aren't structural.

Can you break them down into phases that could be done over a period? I agree with others that these things always cost more than initially thought, so starting with some savings is best.

Every month that you use your surplus to reduce current debt is a bonus.