IS it THAT bad?

loobie

I know our situation could be a hell of a lot better, and we are slowly working on it, but after reading Martin's Mantra - Debt isn't bad, bad debt is bad", I think we have got our debt under some sort of control.

Mgage - 85000
Loan - 15000 - 214.15 / month - 11.9% APR

Both will be paid off in Novemeber when fixed rate ends

First Direct Gold Card - 4313 - 4.95% APR for 60 months - 55 months remaining

Amazon - 2700 - 6.95 for life of balance

Sky Card - 2000 - 0% til January 2009 - hopefully pay off before

Hopefully make a big dent in Amazon and Sky before Xmas.

Like I said, I know it could be better, but if someone could tell me it isn't TOO bad, I'd feel a lot happier about it.

TIA x

Lucifa73

Whether the debt is 'bad' or not is subjective. If you feel you can afford it, its not impinging on your lifestyle and you are generally comfortable that its under control then I guess for you it isn't bad.

What you might want to consider is how to make it better and, perhaps more importanlty, how to stop it getting worse. How did the debt build up? Is it because you live day to day beyond your means or is it a result of considered purchases where you were happy to incur the debt to get the benefit?

So you see, the number in £ is fairly irrelevant - its how YOU feel about it and can cope with it that, in my opinion, makes a debt bad.

cat4772

Loobie

50 people could come and give 50 different opinions...

I'm of the opinion that no other opinion counts but your own; and debt is about our perceptions of it! If you feel your debt is out of control and escalating then it's a problem. If you are succesfully reducing it then it's not a problem just a number!

or as Lucifa said!

Cat.x

tyllwyd

loobie wrote: »

Mgage - 85000
Loan - 15000 - 214.15 / month - 11.9% APR

Both will be paid off in Novemeber when fixed rate ends

Sorry, I'm not sure I have understood what you said - does this mean that you have a mortgage and a secured loan, but you will have paid both of them off so that they will both be gone by the end of the year? Will you have any other mortgage at that point - and will you have equity in your property?

loobie

Yes, we will be re-mortgaging in November. We will need approx 110,000, and atm our house is worth a MINIMUM of 128000.

Lucifa73

Why will you need £110k? Do you plan on rolling all your debts into the mortgage?

RAS

loobie

Welcome

Is your current loan secured on the house?


Please can you explain why you are taking out a £110,000 mortgage to replace a £100,000 of current debts.

Are you aware that all the better rates are for LTVs of 80% or less, which would be £102,400, so you will have to pay a higher rate to get the extra money?

And have you put the details into the snowball on www.whatsthecost.com, so you understand how much extra interest you wil;l be paying of over the extra years of you mortgage?

mrcow

loobie wrote: »

Yes, we will be re-mortgaging in November. We will need approx 110,000, and atm our house is worth a MINIMUM of 128000.

Not what you want to hear....but yes....it's very bad. That level of debt is the stuff of nightmares tbh.

You have unmanagable debt. The "debt isn't bad" mantra is referring to affordable debt. You have thousands of pounds of credit card debt that you can't afford to pay off and are even looking at consolidating onto your mortgage!

btw......borrowing more money isn't "paying it off"!

loobie

So what can we do? Dh pays all the household bills, and I pay the shopping, fuel, loan and credit cards.

RAS

At this stage, it is dufficut to tell you as we do not know your income and expenditure.

if you put up your SOA, preferably for both of you, we can advise if there is money to par from your expenditure or not see http://forums.moneysavingexpert.com/showthread.html?t=107280

If this is not possible, then you will need to talk to one of the debt charities. There will need your SOA as well, so it would be worth getting started on that, even if you do not want to post it up.

Lucifa73

Have you done a full SOA? It is the best place to start to see what goes out and what comes in and until you know where it comes from and where it goes to there's no foundation for a long term plan.

Keep a spending diary - I did and was horrified how much my 'occasional' coffee/lunch/magazine/'treat' was costing me a month - my coffee and muffin habit would have paid for a 2 week holiday in the sun each year! Or cleared one of my credit card balances in its entirety. I've halved my debt in the year since I registered and I don't do a lot of the earning things like ebaying surplus stuff, I just cut costs where I could. And I even still have the odd muffin or coffee...

The £110k loan seems to consolidate all your credit cards - this might look attractive because the monthly repayment goes down but will, in the long run, most likely cost more (see RAS's post about www.whatsthecost.com).

If you need help then you have most definitely come to the right place. Whether you decide to post a diary thread or simply hover in the background there is a wealth of knowledge on this forum to help you get rid of your debt.