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  • FIRST POST
    • mcscoobs
    • By mcscoobs 8th Nov 18, 8:59 AM
    • 72Posts
    • 11Thanks
    mcscoobs
    Is there a smarter way of me getting out of debt?
    • #1
    • 8th Nov 18, 8:59 AM
    Is there a smarter way of me getting out of debt? 8th Nov 18 at 8:59 AM
    I guess the question is, I want to work smarter, not harder

    So here's my current debt issues:

    Sofa from Sofology since November 2017
    Settlement figure as of today: 1045.81
    Last payment due: 01/10/2020
    Currently paying: 45.47 per month
    Term: 36 months - 0% APR

    Loan from Halifax
    Loan taken out totalling 18,000.
    Remaining: 17,177
    Monthly payment: 330.75
    APR: 7.9%
    63 months to go out of 67 month term
    Settlement figure is 17,400 as of today

    Barclaycard
    Current Balance: 6300
    Credit Limit: 14,700
    Currently monthly payment: 120
    0% balance transfer for another 18 months

    Tesco Credit Card
    Current Balance: 0
    Credit Limit: 5300

    Car loan
    Total loan taken out: 4,000
    APR: 14.9%
    Current monthly payment: 138.55 per month
    36 months - repaid 554.20 so far

    So currently everything is manageable and i'm able to pay each month, that's not an issue. But i'm wondering if I can work smarter and juggle debt around?

    With regards to my circumstances, I may soon be in a position where i'll be living back home (relationship breakdown), which may potentially mean i'll have another 1000-1500) a month to play with to put towards debt.

    Any advice is appreciated!
    Last edited by mcscoobs; 08-11-2018 at 9:01 AM.
Page 1
    • Unicorn cottage
    • By Unicorn cottage 8th Nov 18, 9:33 AM
    • 106 Posts
    • 190 Thanks
    Unicorn cottage
    • #2
    • 8th Nov 18, 9:33 AM
    • #2
    • 8th Nov 18, 9:33 AM
    Hiya! Best thing to do is fill out a statement of affairs using the following link and post the results on here so people can advise on changes you can make to save money etc.(http://www.stoozing.com/calculator/soa.php)

    Have you heard of snowballing? It looks like the best way for you to tackle these debts is to overpay the debts with the highest APR first so you will pay them off faster and pay less interest - http://www.whatsthecost.com/snowball.aspx
    Following the Martin mantra "Earn more, have less debt, improve credit worthiness"
    • Rocco86
    • By Rocco86 8th Nov 18, 12:07 PM
    • 7 Posts
    • 19 Thanks
    Rocco86
    • #3
    • 8th Nov 18, 12:07 PM
    • #3
    • 8th Nov 18, 12:07 PM
    From a quick glance have you considered using the Barclaycard to pay off the car loan as your card is currently 0%. Then use the car payment as either overpayment to loan or if you can't do that use it to overpay Barclaycard.
    • mcscoobs
    • By mcscoobs 8th Nov 18, 12:50 PM
    • 72 Posts
    • 11 Thanks
    mcscoobs
    • #4
    • 8th Nov 18, 12:50 PM
    • #4
    • 8th Nov 18, 12:50 PM
    This did cross my mind, think the minimum payment on the barclaycard (currently 120) would increase massively with another 3500 put on it?

    I do currently slightly overpay barclaycard each month, I pay 150. Not a huge amount but its something
    • redux
    • By redux 8th Nov 18, 12:51 PM
    • 18,643 Posts
    • 24,906 Thanks
    redux
    • #5
    • 8th Nov 18, 12:51 PM
    • #5
    • 8th Nov 18, 12:51 PM
    From a quick glance have you considered using the Barclaycard to pay off the car loan as your card is currently 0%. Then use the car payment as either overpayment to loan or if you can't do that use it to overpay Barclaycard.
    Originally posted by Rocco86
    The way I would read that is the transfer offer on BC may be historic, done a year or so ago, and not necessarily available right now.

    Paying a loan back direct from a card isn't usually possible, and the intermediate step of a money transfer out to a bank isn't available on all cards.

    It would also involve paying it back in 18 months instead of 32, or finding a new 0% offer later to replace the remainder of that one. Either of these may be possible, but it's worth doing some arithmetic to check if the cashflow fits.
    • mcscoobs
    • By mcscoobs 8th Nov 18, 1:07 PM
    • 72 Posts
    • 11 Thanks
    mcscoobs
    • #6
    • 8th Nov 18, 1:07 PM
    • #6
    • 8th Nov 18, 1:07 PM
    Appreciate the response. The barclaycard is relatively new, I've checked and I do still have a 0% offer for 18 months. Also, the Tesco card, I could probably get a 0% deal of sorts if I spoke to them. Not sure if I have a money transfer offer available on Barclaycard but I definitely do on the Tesco card. Paying it back in 18 months is certainly do-able and my preferred option when my circumstances change from January.

    In the meantime, I've just requested a settlement figure for my car loan.
    • enthusiasticsaver
    • By enthusiasticsaver 8th Nov 18, 2:32 PM
    • 7,282 Posts
    • 15,966 Thanks
    enthusiasticsaver
    • #7
    • 8th Nov 18, 2:32 PM
    • #7
    • 8th Nov 18, 2:32 PM
    How did you manage to accumulate that much debt is the first question? Do you own a property or is this debt consolidation from overspending?

    Moving the car loan by using a 0% money transfer card would save you money providing the BT fee is not too high. Paying 634.77 in debt repayments against 28k approx of unsecured debt sounds relatively high but it depends on your income. Both of your loans are charging a relatively high interest rate which would indicate either you are overstretched financially or have some defaults/late payments. I would use your reduced outgoings to sort out the debt issue before it gets further out of hand.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • mcscoobs
    • By mcscoobs 8th Nov 18, 2:42 PM
    • 72 Posts
    • 11 Thanks
    mcscoobs
    • #8
    • 8th Nov 18, 2:42 PM
    • #8
    • 8th Nov 18, 2:42 PM
    I used to be in a mess financially, loads of little loans, store cards, high interest credit cards, a familiar story. I was finally able to get on top of things by getting a relatively big loan to consolidate the debt. I earn a decent wage. I should be able to clear the big loan in a year as of January, that's the plan anyway!

    The car loan is via a Salary Sacrifice scheme through my work, which I opted for as I needed a car asap (at the time), so took it even though the APR was higher than I liked. Need to get rid of this big loan!
    • DD265
    • By DD265 8th Nov 18, 9:00 PM
    • 1,539 Posts
    • 3,427 Thanks
    DD265
    • #9
    • 8th Nov 18, 9:00 PM
    • #9
    • 8th Nov 18, 9:00 PM
    I'd be tempted to see whether you can do money transfers to both cards - one for the car and the other for some of the loan. That said, you'll need to do the maths on the MT fees and also repayments to make sure that it's still affordable and cheaper than paying the interest as it stands now.

    This might be helpful though it's only an indication: https://www.barclaycard.co.uk/personal/credit-cards/interest-calculator

    You also need to make sure that you have some cash for an emergency fund so that would be my first priority, followed swiftly by the car loan (unless it's become interest free by virtue of a MT). My aim would be to get the Barclaycard balance below the Tesco limit so that I could (theoretically) do a balance transfer at the end of the interest free period if I had to.
    • Craig1981
    • By Craig1981 9th Nov 18, 5:54 AM
    • 438 Posts
    • 203 Thanks
    Craig1981
    personally, i wouldnt add to your card now to clear the car loan, unless you can afford to pay more now... the 120 paid on barclays is from my calculations, the minimum already. and unless the offer a Money Transfer, this wont work anyway. you going to have a high interest rate on barclays on a high balance once the 0% ends as it stands

    if tesco do offer a MT for 12 months ( i get this on mine on a monthly basis), again, this will nearly max out your card, and to clear it in 12 months would be around 300 odd (dependant on the settlement figure for car loan. that would be an extra 170 a month more than you paying out at the moment. if you only pay the 135 odd, then you will be left with 2k on the card with 19.9% (assumed) APR, higher than current loan now

    as already suggested, if you post a SOA, people may give some constructive advice on where to cut back/save some extra money to overpay some of the loans.
    • natlie
    • By natlie 9th Nov 18, 7:51 AM
    • 1,202 Posts
    • 5,217 Thanks
    natlie
    I'd pay minimum on Barclaycard for now and throw cash at Sofology just to get rid, then the car finance.

    The Barclaycard payment should be transferrable to another 0% offer if your credit rating is good

    I would let the loan tick along until you have the extra cash from paying the sofa and car off
    27328 26,728 26,668 26475.20 26,696.77 DOH
    • BadDebtor
    • By BadDebtor 9th Nov 18, 10:02 AM
    • 24 Posts
    • 8 Thanks
    BadDebtor
    I used to be in a mess financially, loads of little loans, store cards, high interest credit cards, a familiar story. I was finally able to get on top of things by getting a relatively big loan to consolidate the debt. I earn a decent wage. I should be able to clear the big loan in a year as of January, that's the plan anyway!

    The car loan is via a Salary Sacrifice scheme through my work, which I opted for as I needed a car asap (at the time), so took it even though the APR was higher than I liked. Need to get rid of this big loan!
    Originally posted by mcscoobs
    What you have not made clear is the WHY ?

    Why do you suddenly want to clear this debt?

    Do you plan to buy a house or start a business, or do a security related job?

    You clearly have the funds to service the debt and you say you can clear it in a year, so what is the urgency.

    7% is a lot in current climate but in a year or two it will be considered cheap.

    If you have that much disposable income to pay off 17k in a year then investing in FTSE top 100 or 500 in a mutual fund might exceed the 7%

    The 0% debt can certainly be used in this way, not that I recommend it.

    In your position I would get rid of all your debt, retain one card to get extra protection on purchases over 100 and start using your surplus money to invest. Do it through a company you setup because when you are old they will take it all anyway to pay for a care home where you will be abused regularly!
    • mcscoobs
    • By mcscoobs 9th Nov 18, 3:06 PM
    • 72 Posts
    • 11 Thanks
    mcscoobs
    SOA below:

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 3000
    Partners monthly income after tax....... 600
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 3600


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 995
    Management charge (leasehold property).. 0
    Council tax............................. 0
    Electricity............................. 57
    Gas..................................... 17
    Oil..................................... 0
    Water rates............................. 0
    Telephone (land line)................... 0
    Mobile phone............................ 0
    TV Licence.............................. 0
    Satellite/Cable TV...................... 33.5
    Internet Services....................... 19
    Groceries etc. ......................... 300
    Clothing................................ 0
    Petrol/diesel........................... 200
    Road tax................................ 0
    Car Insurance........................... 36.03
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 76
    Other child related expenses............ 329.31
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 15
    Entertainment........................... 7.99
    Holiday................................. 0
    Emergency fund.......................... 30
    Total monthly expenses.................. 2115.83



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 4000
    Other assets............................ 0
    Total Assets............................ 4000


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Sofology.......................1000......45.47.... .0
    Car Loan.......................3700......138.5.....14. 9
    Halifax Loan...................17000.....330.7.....7.9
    Barclaycard....................6300......120...... .0
    Total unsecured debts..........28000.....634.67....-



    Monthly Budget Summary

    Total monthly income.................... 3,600
    Expenses (including HP & secured debts). 2,115.83
    Available for debt repayments........... 1,484.17
    Monthly UNsecured debt repayments....... 634.67
    Amount left after debt repayments....... 849.5


    Personal Balance Sheet Summary
    Total assets (things you own)........... 4,000
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -28,000
    Net Assets.............................. -24,000


    Created using the SOA calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.


    Usually have 500 left over as disposable income, but this is (currently) placed into a joint bank account with my partner, but thats another story I won't go into
    • heartbreak_star
    • By heartbreak_star 9th Nov 18, 5:08 PM
    • 7,685 Posts
    • 16,959 Thanks
    heartbreak_star
    Nothing for birthday or Christmas presents despite 2 kids? Remember to budget for everything - that has always been my failing...

    HBS x
    I believe in ordinary acts of bravery, in the courage that drives one person to stand up for another.

    #JC4PM
    • mcscoobs
    • By mcscoobs 9th Nov 18, 5:10 PM
    • 72 Posts
    • 11 Thanks
    mcscoobs
    What we currently put into joint account each month caters for any events we have that month, whether it be birthdays/anniversaries etc, so that's covered off
    • Willing2Learn
    • By Willing2Learn 9th Nov 18, 5:18 PM
    • 1,751 Posts
    • 1,338 Thanks
    Willing2Learn
    What we currently put into joint account each month caters for any events we have that month, whether it be birthdays/anniversaries etc, so that's covered off
    Originally posted by mcscoobs
    But the money you are putting aside into the joint account each month needs to be budgeted for. Every penny that you receive as income needs to be budgeted. That is the only way I know of, that will reduce debt

    Edit:
    Why is there no water rates?
    Why is there no telephone or mobile bills?
    Why is there no TV license bill?
    How much do you budget monthly for clothes for all of you?
    Why is there no road tax bill?
    Why is there nothing budgeted for car parking?
    Is 7.99 a realistic amount for monthly entertainment costs?
    Why is there no insurance for home contents?

    Edit 2: Sorry if I am a pain in the butt, but, realistic monthly budgeting is essential...
    Last edited by Willing2Learn; 09-11-2018 at 5:22 PM.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • mcscoobs
    • By mcscoobs 9th Nov 18, 5:21 PM
    • 72 Posts
    • 11 Thanks
    mcscoobs
    Oh I agree. Like I've mentioned earlier, as of January, circumstances are changing, so i'll have this 500 plus an additional 1000 to put towards clearing debt
    • Willing2Learn
    • By Willing2Learn 9th Nov 18, 5:23 PM
    • 1,751 Posts
    • 1,338 Thanks
    Willing2Learn
    Oh I agree. Like I've mentioned earlier, as of January, circumstances are changing, so i'll have this 500 plus an additional 1000 to put towards clearing debt
    Originally posted by mcscoobs
    Did you get my edits lol?
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • mcscoobs
    • By mcscoobs 9th Nov 18, 5:27 PM
    • 72 Posts
    • 11 Thanks
    mcscoobs
    Just saw the edits! Currently my partner pays for Water, TV Licence, Council tax. I pay for netflix for 7.99. I get my mobile phone contract for free and parking is free for me (at work). Contents and road tax was paid in full when it was taken out. I literally listed all my current outgoings and put it above. I'm not the best "planner" to be fair!
    • Willing2Learn
    • By Willing2Learn 9th Nov 18, 5:30 PM
    • 1,751 Posts
    • 1,338 Thanks
    Willing2Learn
    Just saw the edits! Currently my partner pays for Water, TV Licence, Council tax. I pay for netflix for 7.99. I get my mobile phone contract for free and parking is free for me (at work). Contents and road tax was paid in full when it was taken out. I literally listed all my current outgoings and put it above. I'm not the best "planner" to be fair!
    Originally posted by mcscoobs
    You still need to budget for things like contents insurance and road tax. How will you pay for these things in the future, if they are not within your budget? I think we have identified a fundamental flaw in your budgeting methodology. I recommend it is addressed asap
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

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