Which is the best way forward?

tenmah

Hello

I am after some advice please?

I have a loan with the AA. It was originally for £9500 but currently is at £7120 after paying regularly for about 15 months. I repay this monthly at £195.43

I also have an overdraft of £2650 and I am up to the limit on this. I have changed bank accounts from Barclays to A&L and got £50 from quidco for doing so. This has a 0% overdraft facility but wouldn't match my current overdratf because I hadn't been in credit for two days over the month.

I would like to pay off the overdraft, and this is what I would like some advice about.

Do you think I should:

a) get 0% credit cards and money transfer the overdraft onto them and then throw as much as I can at them each month? or

b) add an entra £3000 onto my loan? This would make the loan repayment £211.79 which is about £16 more than I am paying now, but that is less than the interest I am currently paying at Barclays.

However it also adds another year on to my loan. I was hoping not to do that as that is how it has got so big because I kept borrowing more on it.

I know most people are against consolidating loans to pay off other debts but the thought of having no overdraft seems really good.

I have cut down on spending considerably since being on this site. I consistently have NSD during the week as I take my own lunch, I have cancelled my daily and weekend papers, I have switched utility suppliers and generally watch my pennies.

I would like to start again with no overdraft to see and live within my wages, whilst paying off my loan.

Any advise would be appreciated.

Sorry about the long post.

Tenmah

ltm07

Hi tenmah. I would try option a if I was you. I do take your point about consolidating though. We did consider it a few months back & were going to transfer our debts onto our mortgage. The interest on the £32 would have been a staggering £22k though! That said, I am tempted to look into it again if we do continue to struggle,as if we lowered our monthly outgoings we could easily budget for things as like yourself, our spending habits have changed no end. I'm probably not the best person to give you advice but other great people on here will be on to give you some good advice. Good luck whatever you decide.

tenmah

Statement of Affairs and Personal Balance Sheet[/b]
Monthly Income Details[/b]
Monthly income after tax................ 1400
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1400

Monthly Expense Details[/b]
Mortgage................................ 0
Secured loan repayments................. 195.43
Rent.................................... 495
Management charge (leasehold flat)...... 0
Council tax............................. 77
Electricity............................. 44
Gas..................................... 44
Oil..................................... 0
Water rates............................. 36
Telephone (land line)................... 35
Mobile phone............................ 5
TV Licence.............................. 11
Satellite/Cable TV...................... 10
Internet Services....................... 10
Groceries etc. ......................... 175
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 7
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1184.43

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

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 9500.....(195.43)...7.3
Total secured debts........... 9500......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
overdraft......................2650......0.........18.3
Total unsecured debts..........2650......0.........-

Monthly Budget Summary
Total monthly income.................... 1,400
Expenses (including secured debts)....... 1,184.43
Available for debt repayments........... 215.57
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ 215.57

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -9,500
Total Unsecured debt.................... -2,650
Personal net worth...................... -12,150

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.[/font]

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

MrsTinks

OK first up the debt is unsecured not secured unless it's secured on a property

Utilities - is there only you living there? If so then these seem rather high! Have you checked on Uswitch for better deals and make sure you use quidco for cashback!
Food - £175 is a lot of food for one person? Do check the OS board for great cost cutting ideas there.

I woudl suggest you keep a spending diary for the next month to see exactly what you spend but don't realise

tenmah

The utility is what I am paying now, but I have switched and I am just waiting to see what the monthly payments will be from now on.

There is myself and my daughter who is nearly 21 and lives with me during term time as she is at Uni. However she is home for three months over the summer and pays for the weekly shopping once out of the four weeks for each month, so that really helps.

The monthly shopping total includes all groceries, toiletries and cleaning products.

Tenmah

cantcope

Firstly well done for posting. I would go for option A.
i also have a few suggestions/comments.

The grocery bill seems extremely high even if your daughter is there too. I live alone and regularly do a full months grocery shop at about £60 and this includes all non food items. I'd suggest going through all your cupboards to see exactly what you have. Over and over again i bought things (on a whim wandering through the aisles) to find i already had it at home.
Chances are you have enough food in your cupboards and cleaning materials to last over a month anyway so you might find you can skip the big grocery shop for a month and just buy essentials.
Sign up to the survey sites, pigsback pays for my toiletries (boots vouchers) and i can get 3 months worth with a £10 voucher.
Pinecone gives £4 luncheon vouchers for each survey completed. i usually get between £8 and £20 a month from this.
There are lots more, take a look on the freebie board.

You can cut the tv subscription and if you must have extra channels you can pick up freeview boxes for around £10-15 nowadays.. just one months payment.

Your phone bill seems high, can you lower this? Would it be cheaper to pay for inclusive calls? BT is about £2.50 for anytime calls excluding mobiles.

Contents insurance... when is this due for renewal? I've just gone through quidco to use churchill. For an yearly fee of just over £80 i got £80 cashback. Worth a look if you are due to renew soon

You have over £200 left at the end of the month..what do you spend this on? Could you halve it and pay £100 extra off your overdraft each month?

You'll get loads of useful advice on here so make sure you come back regularly to check your thread.

Good luck

tenmah

Hi

I will try to reduce my grocery bill but am on a diet and seem to buy loads of fruit which is not really very cheap. I do go to the local market and buy stuff there, which is cheaper than Tesco's but still is a lot.

I do already do pigsback and pine cone although that seems to have gone a bit quiet recently. I use quidco too.

The tv, landline and broadband is on the 3 x £30 with virgin. The reason my phone bill is so high is because I phone my daughter at Uni and she only has a mobile, however she is now home for three months so that should reduce it and also we have bought internet phones which should help once she is back at uni.

I changed my insurance to MoreThan and got the cost down to £10 per month but unfortunately had to make a claim on a dropped laptop so probably wouldn't get any cheaper anywhere else just now. I hadn't had a claim for 5 years before that!

I think I must have forgotten something on my SOA because no way do I have £200 left each month, if I did I could have been paying off my overdraft, so I will need to do a spending diary to see where it is all going.

You are right about the cleaning cupboard, I do tend to overstock on stuff, so could probably cut back a bit there.

Tenmah

ltm07

Hi again. It may be worth doing a shop at Aldi now & again,if you don't already do so. We have done so & have made massive savings on our food bill. Also the fruit & veg there is very cheap & good quality. All the best.

cantcope

Internet phones are an excellent idea and should definitely lower your bill. Speaking to your daughter is important so i understand why you wouldnt want to cut that out.

I also agree that fruit isnt particularly cheap so markets are the best way to go. Carry a notepad with you for the next month to see where your surplus income is going. I found this really useful and quite shocking to see how much i spent on magazines, papers, chewing gum, general stuff that i really didnt need.

How about doing a few bootsales while your daughter is home? Or getting some stuff put on ebay.

Also check the freebies board daily. There's a great freebie available at the moment on moveme.com which would get you loo roll, kitchen towells, milk, cif cleaner and money off coupons. it all helps.

tenmah

Well i have now bitten the bullet and applied for an Egg Card, only to find i still had one from sometime ago! Which was good because it was sat there ready to be used. So I have applied to transfer some of it into my current account to reduce my overdraft. It is a start!

Just need to find another card to do the rest of the overdraft with. I have applied with Virgin, but it said I need to phone them to discuss a couple of things, and I worry about doing that. I know it is silly but I always imagine them sitting in their office judging me because I can't handle my money.

Anyway I feel as if I have made a step in the right direction instead of just thinking about it all the time.

Tenmah

bountiful

Hi Tenmah - glad to see you have started a thread on DFW - and you are getting good advice. I will be following your progress. Sounds like we have some similarities - I live alone with my son who is 21 and has just given up university - works weekends at Sainsbury's - live in rented property too. LOL xxx