Balance Transfer or loan and transfer

BLlaya55

Hi folks

First post on this forum after much deliberating and partially denial of any problems that I am in debt!

I have two credit cards one with Virgin (MBNA) currently with a balance of around £9k and one with Halifax currently with a balance of £8k. Both are at the brink of their limit.

I want to pay off one of the cards and am thinking that a loan would be the best bet and then transfer the other card balance to a 0% balance transfer and start attacking the payments on that card (assuming I get approved for either).

I have recently got my credit reports from Experian and Equifax and they came out either Very Good or Excellent, so I have not had any past issues like IVAs or defaults.
I have missed payments on some occasions but never more than one month.


Would getting a loan be the best policy? I need a structured way of paying off at least half this debt as its become unmanageable. I have been reading about the "Credit Crunch" and am paranoid that I will get turned down for a loan. I used to have a loan with northern Rock and that was for £8k and this was paid off over 4 years. Should I apply for a loan of say £8k or should I go for less?

Really appreciate any tips or feedback as I know this is a fairly active forum.

Cheers

B

GeorgeUK

Shifting debt onto a loan is usually not a good idea unless you are getting a great rate and have no other options available.

If you post up a Statement of Affairs on the DFW board, we may be able to advise where to save some money and see how much you can afford to repay. In the short term though, you need to identify why you are in debt and take steps to endure that you are not going to keep repeating what you are currently doing.
http://www.makesenseofcards.com/soacalc.html


I'd try to get a few 0% cards before trying for a loan, but you need to be careful about the number of credit checks that get done on your file. Post up some details and we'll try to sort this for you.

BLlaya55

Hi George

Thanks for your reply on this. Sounds like you are suggesting getting a 0% card in the first instance.

I have pasted the Statement of Affairs below. I also spoke to my local council as I am not on the electoral role and this is being updated apparently on May 01st 2008 so I will be on that one and will wait until then to apply for a different credit card.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1800

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 565
Management charge (leasehold flat)...... 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 50
Mobile phone............................ 80
TV Licence.............................. 10
Satellite/Cable TV...................... 0
Internet Services....................... 30
Groceries etc. ......................... 150
Clothing................................ 20
Petrol/diesel........................... 40
Road tax................................ 10
Car Insurance........................... 40
Car maintenance (including MOT)......... 30
Car parking............................. 10
Other travel............................ 70
Childcare/nursery....................... 0
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 35
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 25
Entertainment........................... 300
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1535

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 800
Other assets............................ 0
Total Assets............................ 800

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin ........................NaN.......280.......15.9
Halifax........................NaN.......178.7.....21.95
Total unsecured debts..........NaN.......458.7.....-

Monthly Budget Summary
Total monthly income.................... 1,800
Expenses (including secure debts)....... 1,535
Available for debt repayments........... 265
Monthly UNsecured debt repayments....... 458.7
Surplus(deficit if negative)............ -193.7

Personal Balance Sheet Summary
Total assets (things you own)........... 800
Total Secured debt...................... -0
Total Unsecured debt.................... -NaN
Personal net worth...................... NaN

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========

Cheers

Ben

CLAPTON

the first and most urgent problem is to reduce you outgoings to match your income

a. can you increase your income? overtime, parttime work (maybe bar work might both increase income and deduce socialising costs)

b. outgoing...
you can't afford 300 for entertainment... what halfing this so saving 150 per month
or mobile costs of 80... what about limiting yourself to 30 ? so saving 50 per month
BT of 50 is high (especially with the mobile as well) ..depending upon your useage try www.1899.com or www.18185.co.uk you can talk for hours for very little

again internet at 30 is high .. quite a few at round 15 per month
and how many does 150 per month on food feed?


these cuts would at least stop the debt rising... and if you are at the limit of your cards you will soon start defaulting which will make your situation much much worse.

Also how accurate are the spending figures.. try keeping a spending diary and record everything you spend.

Debt
you are paying high APRs on the CC... so a 0% card may well help but do read the T&Cs before applying and be aware that even with 0% cards you still have to pay the minimum amount each month which may mean your monthly outgoings don't actually reduce although you will of course pay the debts off earlier and with less interest.