Grateful for any advice!

KateE

Hello, I'm new here. Having not been on the ball for a while due to dodgy health, I sat down last night and worked out that I have nearly £24K on credit cards. I am SO ashamed of myself. I have 6 cards, which I'll list, and am not paying much more than the minimal payments. My mortgage is £690 per month, which I've tried to reduce but am not getting good deals because of my credit card debt. Of course, if I paid less on my mortgage I could pay more off on the cards...... I've been offered a loan from BoSHalifax at 6.9% APR to pay off £24000 over 7 years at £450 per month, or £15000 over 5 years at £360 per month. I was thinking of the latter, to clear off the cards with the highest interest rates, and then a bit of card tarting to clear the rest. I'm not a shopaholic, and have the used the cards stupidly when my current account is overdrawn.

BoS Mastercard £7412 (int 15.9%) min pay £148
Egg £7000 (int 15.9%) min pay £120
MBNA (1) £2740 (int 22%!!) min £45
MBNA (2) £4594 (int 12%) min £100
Mint £572 (int %16.6) min £12
Capital One £1740 (int 0% til Jan 06) min £54

Mortgage £690 (approx 6.9%)
Income £1600-1800 per month, depending on overtime.
I haven't done a full budget yet, but basically I have nothing left at the end of the month, and am often over my £300 overdraft and then have to pay charges: I was declined a further overdraft. I have figured I can save about £100 from being careful with groceries, changing car insurance etc.

Basically, my brain feels like mush from the stress, so if anyone has any suggestions about whether the loan (unsecured) would be a wise way to go, I'd be very grateful!
Kate

kazzaj

My initial thought is that your mortgage rate seems rather high? Is it worth contacting your lender to see if there's a better deal for you, which might release a bit of cash on a monthly basis?

Bestthingsinlifearefree

Kate welcome,

you have come to the right place for sensible free financial advice and support. Don't panic you have options and you will get through this and don't let it get you down. You are taking the first steps to take control.

If you do get a loan definitely make sure it unsecured.

I am sure some wiser heads will be along soon to assist you.

The interest rate for your mortgage seems very high. Are there any redemption penalties for remortgaging to a differnet provider ? Have you spoke to your current lender ie if you tell them you have abetter deal else where and will be changing...maybe they will offer you a much more competitive rate to stay.

what is your mortgage debt ? what is the term left on the mortgage e.g 20 years or 25 years etc etc and what is the value of your property ?

northerngirl_2

Same here we're £25,000 in debt mainly with cc,we're looking into a loan with Tesco's there 6.3% on their loan which is quite a good rate,we're hoping to take out £20,000 over 7yrs and top up a previous loan with A&l for the £5,000 over 5yrs.

mountainofdebt

Firstly welcome to MSE....its a great site and full of people ready and willing to offer practical advice.

I know it sounds hard but don't worry - at least you've had your light bulb moment and am starting to do something about it.

What you will need to do now is post your budget. If you could also post your limits on your cards then that will help to see if we can get the debt down quicker by simply moving it around so you pay less interest.

(also find out when your anniversary month is with egg - how long have you had this card?)

I was paying MBNA 24.9% (yes I know!) and managed to get it down to a promotional rate and when that finishes next month it will only increase to 7.9%....but I plan on beating them down on that !!!!

Unfortunately my computer crashed last weekend and I lost the letter ....but if you like I can PM you and give you the gist of what it contained...never know it might help you like it helped another MSEr!

Do you live alone? The immediate thought might be to get a lodger but obviously this might not appeal.

Post those details and we'll see what we can suggest.

KateE

Thanks for your suggestions. I had a bit of a wobbly yesterday pm: when I phone Bank of Scotland back for some more calculations the bloke I spoke to said that basically there was no way I'd get a loan with my curent account overdrawn! He apologised for the bad advise I'd been given by two of his colleagues earlier in the day, who'd pretty much said that the money would be in my account the next day! Out of desperation I did a balance transfer of £500 from my cheaper MBNA card at 4.9% into my current a/c to cancel out the ovedraft and to start making it all spick and span looking, as he said not to apply for a loan til my account has been in good order for a couple of months.

I sat down and worked out my budget, which I've left at home (won't be getting a computer for a while yet, it seems), and I think I can shave off about £150-200: I'll be on the porridge diet for a while. I have thought about a lodger but my last one was a bit of a violent loony, which has put me off.

My mortgage is with Lloyds TSB but they weren't helpful when my initial 2 yr period was up. Got 23 yrs to go. I made a couple of enquiries to other companies but again until my current a/c is in better shape I can't get a good offer. Hating these vicious circles!

Mountainofdebt: if could pm me about the letter thav would be great.

On a happy note I cleared out my penny jar and got 40 quid!

Thanks again for your support and suggestions,
Kate

Thefunkygibbons

Looks like you are in for the long haul

Basically we need to find you some spare money that you can throw at each of the cards to clear them

Whilst it would be nice to get some of the money off onto a cheaper card, I think those might be hard to find.

However, if you can clear and close a couple of cards, that will improve the credit file and it may make finding a lower rate for a life of the balalnce card

You need to budget for the increased monthly payments when the nil% rate runs out in January unless you can get another one, again it would be easier with fewer cards outstanding and a few shown as settled on the file

I would suggest that what you should learn from the last experience is not

No more lodgers

but rather

No more loney lodgers

Choose a better one next time