Frustration of unaffordable rates
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DebtFreeWannabeHezza
Posts: 5 Forumite
My husband and I have been through a rough couple of years between mental health issues and an absolute nightmare with a huge case of dry rot in the house we live in (the agreement we have is that we don't pay rent but we're responsible for maintenance, which normally works out well, but not this year). In that time I've made some bad financial choices and we now have about £39k of unsecured debt. I've managed to get about £8k of it onto low interest (0% to 4.9%) credit cards, but the rest is on at least 17.9%.
I've switched our fuel to the lowest provider and have spent all weekend working out our income against our essential and flexible outgoings. The rest would be manageable if we could convert our highest £15k into a loan with a monthly repayment around £330. The banks' headline rates of 3.9 or 4.6% are easily inside that figure (they work out at something like £270 per month), if I spread the loan over 5 years, but of course I'm not offered the headline rate. Instead, I'm offered rates of over 15% (my bank offered me 19.5% - really, what is the point?!), which would make my monthly payment more like £500 or more, and just compound the problem. I'm a member of the MSE Credit Club and my credit score is 726 so I'm basically not eligible for any Balance Transfer cards.
Has anyone found a viable way out of this situation?
I've switched our fuel to the lowest provider and have spent all weekend working out our income against our essential and flexible outgoings. The rest would be manageable if we could convert our highest £15k into a loan with a monthly repayment around £330. The banks' headline rates of 3.9 or 4.6% are easily inside that figure (they work out at something like £270 per month), if I spread the loan over 5 years, but of course I'm not offered the headline rate. Instead, I'm offered rates of over 15% (my bank offered me 19.5% - really, what is the point?!), which would make my monthly payment more like £500 or more, and just compound the problem. I'm a member of the MSE Credit Club and my credit score is 726 so I'm basically not eligible for any Balance Transfer cards.
Has anyone found a viable way out of this situation?
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Comments
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DebtFreeWannabeHezza wrote: »My husband and I have been through a rough couple of years between mental health issues and an absolute nightmare with a huge case of dry rot in the house we live in (the agreement we have is that we don't pay rent but we're responsible for maintenance, which normally works out well, but not this year). In that time I've made some bad financial choices and we now have about £39k of unsecured debt. I've managed to get about £8k of it onto low interest (0% to 4.9%) credit cards, but the rest is on at least 17.9%.
I've switched our fuel to the lowest provider and have spent all weekend working out our income against our essential and flexible outgoings. The rest would be manageable if we could convert our highest £15k into a loan with a monthly repayment around £330. The banks' headline rates of 3.9 or 4.6% are easily inside that figure (they work out at something like £270 per month), if I spread the loan over 5 years, but of course I'm not offered the headline rate. Instead, I'm offered rates of over 15% (my bank offered me 19.5% - really, what is the point?!), which would make my monthly payment more like £500 or more, and just compound the problem. I'm a member of the MSE Credit Club and my credit score is 726 so I'm basically not eligible for any Balance Transfer cards.
Has anyone found a viable way out of this situation?
Ill tell you now that your score isn't worth much since lenders don't see it, they see your credit history.
It sounds like you need the debt free wannabe board more than a loan.
I get your idea for the loan but lenders will see it as extra debt your taking on.
Either reduce your spending or get a second job.
Theres 2 other agencies in the mix, they may well rate you differently, may as well check them to see if they are all ok.0 -
Spend less.
Earn more.
Refinance.
They're your choices. And the third one has been ruled out.0 -
The bank's headline figure is offered to 51% of successful applicants, but successful applicants with a less than excellent credit history will be offered higher rates - sometimes much higher. From the bank's point of view it is all about risk. Your credit score of 726 is more or less meaningless because the bank won't see it. It is credit history that counts.I used to think that good grammar is important, but now I know that good wine is importanter.0
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I'd suggest heading to the debt free wannabes board and posting a statement of affairs (SOA). The folks on there are great for this kind of thing.Officially in a clique of idiots0
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Have you considered moving?0
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As you!!!8217;ve seen, lenders view you as a bad risk, so need to charge you high rates to offset the high risk of default. Refinancing looks to be unavailable for you.
That leaves earning more, or spending less. You need to work out how you can achieve one or preferably both of these.0 -
Hello DebtFreeWannabeHezza and welcome to the forum.
I can only echo the suggestions of others that you post your query on the main DFW board as opposed to this one, where it should get more attention and feedback. The statement of affairs (SOA) referred to above will make it a lot easier for us to assess your options - you can find it at
http://www.stoozing.com/calculator/soa.php
and it can then be easily pasted into a conversation thread like this one.
Dennis
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0 -
Assuming that we don't have a hellish year for household disasters like last year, moving house definitely won't help - we don't pay any rent here so wherever else we moved we'd have another payment for which to find money. We can't take second jobs because we're in the process of starting a new business, which is why my husband's income is so low at the moment (he's only taking odd jobs around the work of building the new business) - after around this time next year we'll have an extra £1,000-2,000 of income each month but somehow I've got to find a way to tide us over the next few months.
The reason I posted here rather than the Debt Free Wannabe board is because whenever I click to post something there, I see a message without the MSE forums header that says:
IMPORTANT NOTE:
The Grabbit Board is for telling people about Top Deals & Offers
If you!!!8217;re asking not telling about a top deal, you!!!8217;re in the wrong place.
Instead please go to the I wanna board.
Are you sure you want to start a new thread here?
So I figured it's been hacked or something. If there's any way for an admin or someone to move my thread, I'd be more than happy - it was the DFW board that I wanted to post on.
I did the SOA thing:
Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 2200
Partners monthly income after tax....... 800
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3000
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 149.22
Electricity............................. 112.68
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25.54
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 101.58
Clothing................................ 10
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).... 34
Pet insurance/vet bills................. 903.48
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 29.25
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 128.98
Holiday................................. 0
Emergency fund.......................... 0
Bank Accounts........................... 22
Magazines............................... 21.77
Total monthly expenses.................. 1558.5
Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0
No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Bank Loan......................5933.83...182.9.....17.5
Credit Card 1..................7623.34...120.8.....4.5
Credit Card 2..................7523.21...78........19
Credit Card 7..................3027.92...0.........0
Credit Card 6..................900.......8.77......0
Credit Card 5..................4666.99...46........0
Credit Card 4..................2290.73...22.91.....0
Credit Card 3..................7337.89...292.7.....29.90 -
Pet insurance/vet bills................. 903.48
Is this a mistake?0 -
I don't know if it is a mistake. But I do know vet bills can be very expensive if a pet needs an operation0
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