Loans Help
bigsisteruk
Posts: 1 Newbie
in Loans
Hi
My brother has highlighted an issue which I was not aware of and I want to help him the best I can, as always, but on this occasion I'm not sure of the best way to approach / deal with the issue...
The following loans / credit cards are outstanding...any hints or tips on how to approach this and get the debt paid off asap? With the loans his deposable income atm is £140 a month, which I know isn't a lot but he's going to look at a possible second income. Should the loans be consolidated? If so, how does he do that? Sorry I'm a total novice when it comes to loans. Unfortunately I don't have any disposable cash to give him and we have no family we can ask for help from at this time.
Loan 1 £9,718 11.84% 21/12/2021
Loan 2 12,551 18.90% 08/08/2022
Loan 3 £4,899 28.80% 11/12/2022
Credit Card £531.99 49.95% compounded annual interest
Overdraft £250
Family Member £647 0%
Any help would be much appreciated, thank you
GF x
My brother has highlighted an issue which I was not aware of and I want to help him the best I can, as always, but on this occasion I'm not sure of the best way to approach / deal with the issue...
The following loans / credit cards are outstanding...any hints or tips on how to approach this and get the debt paid off asap? With the loans his deposable income atm is £140 a month, which I know isn't a lot but he's going to look at a possible second income. Should the loans be consolidated? If so, how does he do that? Sorry I'm a total novice when it comes to loans. Unfortunately I don't have any disposable cash to give him and we have no family we can ask for help from at this time.
Loan 1 £9,718 11.84% 21/12/2021
Loan 2 12,551 18.90% 08/08/2022
Loan 3 £4,899 28.80% 11/12/2022
Credit Card £531.99 49.95% compounded annual interest
Overdraft £250
Family Member £647 0%
Any help would be much appreciated, thank you
GF x
0
Comments
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He needs to cut his costs and overpay as much as possible on the highest rate loan. Once that is gone, move onto the next highest.
The DFW board will give good advice on reducing costs to free up cash.
Consolidation rarely works and with that debt and those sub prime rates, he won't be able to borrow a further £30k from anyone.0 -
Sell everything he can, down value the car, change life style, do the PPI reclaim thing and clear highest interest debts first.
ZX is correct, he will not get a loan to consolidate, it wont work any way. Only way he can reduce the interest would be balance transfer credit cards but I doubt he will be approved for any new borrowing with that level of debt.
What is his annual salary and does he own a property - if he has disposable income at the moment then its not the end - when he goes backwards then think about BR/IVA options.0 -
bigsisteruk wrote: »Hi
My brother has highlighted an issue which I was not aware of and I want to help him the best I can, as always, but on this occasion I'm not sure of the best way to approach / deal with the issue...
The following loans / credit cards are outstanding...any hints or tips on how to approach this and get the debt paid off asap? With the loans his deposable income atm is £140 a month, which I know isn't a lot but he's going to look at a possible second income. Should the loans be consolidated? If so, how does he do that? Sorry I'm a total novice when it comes to loans. Unfortunately I don't have any disposable cash to give him and we have no family we can ask for help from at this time.
Loan 1 £9,718 11.84% 21/12/2021
Loan 2 12,551 18.90% 08/08/2022
Loan 3 £4,899 28.80% 11/12/2022
Credit Card £531.99 49.95% compounded annual interest
Overdraft £250
Family Member £647 0%
Any help would be much appreciated, thank you
GF x
Can't see consolidating working.
Definitely cut costs so bills, get rid of anything he can do without eg magazine subscriptions, look at shopping at Aldi/Lidl etc, don't buy the brand's but shops own brand's.0 -
No consolidation possible with that amount of debt and a sub-prime credit card.
Go round the house, find everything not used, sell it via Facebook/Ebay. Pay off the credit card and overdraft as fast as possible. Read through all the guides on MSE for cheap insurance, gas/electric, mobile phones, insurance, phone/internet and get the outgoings down. Cancel anything you can live without and by live without I mean you won't die if you don't have like Sky TV, Netflix, Spotify, Gym etc etc. Packed lunches for work, no spending £3 a day at Costa or Greggs.
Rice and beans, beans and rice, learn to cook and plan meals. Also no going out for a drink, no going out on a weekend, no holidays. Its taken a while to get to this level of debt, when you're getting a credit card and loans with that high APR its telling you it is now time that borrowing from your future self has got to the point the bills are due and need to be paid.
Its then a case of working through the loans from the highest interest rate to the lowest so you overpay as much as you can to Loan 3 using the money you're now not paying on the credit card/overdraft, once that is cleared use that money you were paying on that to clear off Loan 2 then finally Loan 1.
I would say to open a saver account if possible and stick £100 a month into that at the same time so if an emergency happens then he can use that instead of having to take out more borrowing.0
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