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| The independent answer to your debt problems | login join |
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confused
| 18-02-2008 01:28 PM |
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Joined: 18 Feb 2008 Posts: 4 | Hi all I have been hanging about this forum for a couple of months. I have plucked up enough courage to post so here goes. What is the best way to consolidate my debt, nearly £25k and what is the difference between secured and unsecured borrowing? What should I look out for, are there any cowboy firms out there? Hope you can help Confused |
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| paladin | 18-02-2008 06:50 PM |
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Joined: 06 Jun 2007 Posts: 55 My Profile | Hi Confused Welcome to the forum. I am glad you have plucked up courage. You should really only consider debt consolidation after you have gained control of your spending. This means that you are earning more than you are spending. Once control has been established then you should be looking at where you can make savings. Many people talk about being thrifty but I call it being sensible with your hard earned cash. Dependent on your circumstances debt consolidation can be a useful strategy in dealing with your debt. A secured loan is one where your house is used as collateral, ie the bank will repossess the house if you don't keep up with repayments. An unsecured loan is a loan which, as the name suggests, is not secured on anything. If you have a good credit score then I would suggest using an unsecured loan or even a credit card balance transfer. You could even get a reduced rate of interest on your current credit cards if you threaten to move away. As for cowboy debt consolidation companies it is difficult to point out who to avoid, but I would say shop about and get the best deal. I am sure others will have more to add. All the best P |
| DW George | 19-02-2008 02:46 PM |
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Joined: 01 May 2007 Posts: 148 My Profile | Hi confused Welcome to DW forum. I agree with what Paladin has said about debt consolidation. You should also look at trying to do a deal with the credit card companies you are with. Threaten to do a balance transfer to another company if they don't give you a better rate. Make sure that the other company is not part of the same group though eg Virgin is run by MBNA. An unsecured debt consolidation loan can be a good debt management strategy as it can maintain your good credit scoring. If you are considering a secure loan then make sure you are confident that you are in control of your spending. Post your SOA here and we will see if how much control you have with your spending. George |
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confused
| 19-02-2008 03:09 PM |
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Joined: 18 Feb 2008 Posts: 4 | Thanks for all your advice. I have done my SOA and would appreciate your help. Confused |
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| DW George | 25-02-2008 09:32 PM |
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Joined: 01 May 2007 Posts: 148 My Profile | Confused Your spending does seem a bit excessive. You can't keep spending on entertainment if you want to reduce your debts. However, before I comment any further I need to know if you have a family, living together with a partner or single. George |
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confused
| 25-02-2008 10:50 PM |
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Joined: 18 Feb 2008 Posts: 4 | I am single and have a mortgage. My debts are as a result of buying my partner out when we split up. Yes I do spend a lot on food, I like eating out and the odd pizza/curry. I am open to your suggestions about how best to deal with my debt problem. Confused |
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| paladin | 26-02-2008 10:19 AM |
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Joined: 06 Jun 2007 Posts: 55 My Profile | Looking at your SOA I think that you can bring down your spending in a few areas. -Car, you have £4500 equity in it. Sell the car and get a little run-about for about £600. -Utilities, is quite a lot for a single person. Switch off lights when not in use, stop using the dishwasher, turn down the heating (wear a jumper) etc. These things may appear small but added together can be quite a saving. -You are spending £400 on food and entertainment a month. You need to cut this down. Take sandwiches to work, stop eating out, and avoid take-aways. Aim to spend £150 a month, then try and reduce it. -Stop your life and health insurance. You have no dependent so you don't need them. You probably have some cover from your employers, check this out. -Satellite and telephone can also be reduce. Look around for deals which combine broadband, and telephone. Get a free-view box, it's cheaper. -smoking? What's more important a roof above your head or smoking. -Mortgage, change to an interest only mortgage, this only needs to be temporary. It will release an extra couple of hundred pounds I am being severe but unless you curb your spending you will not decrease your debt, you'll just add to it. The suggestions I have made will release about £450 a month. Use this extra along with the money from the car towards your debts. Speak to all your credit card providers and see if they will put you on a reduced rate, if they won't move to one that will. This is the essence of debt consolidation. Moving all your money to a cheaper form of borrowing. |
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confused
| 28-02-2008 04:10 PM |
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Joined: 18 Feb 2008 Posts: 4 | Paladin, thanks for your reply. I have tried and cut down on my socialising and take-away's. As for the smoking, I don't know how many times I have tried to stop but without success, although I'll give it another go. I have organised a meeting with a financial adviser for next week to try and get a good interest only mortgage-nice idea! Stopped life insurance. I don't want to lose Sky its great for the football and sport and some of my mates come round to watch it. Although I don't expect they come round too often now that i have turned sown my heating, the place is Baltic! I have phoned my credit card providers and I asked them for a reduced rate and all of them said no! I read on this website an article which said that I could be guaranteed that I would receive a reduced rate if I asked. :( Thanks for the advice. What should I do next? confused |
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| DW George | 03-03-2008 10:20 AM |
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Joined: 01 May 2007 Posts: 148 My Profile | Hi confused, It looks as if you are beginning to get things under control. You should go to the doctors and ask about getting NRT, nicotine replacement therapy. You get the patches on prescription, a nice wee saving. As for the Sky , why don't you go round to your friends to watch the football, and to get warm. You have say that you are going to move your credit card debts to a competitor for them to reduce the rate. Try again, but this time say you want to close your account with them and see what they say. In the past I have had them say to me "what do we have to do to keep you". Try again, the worst things that can happen is that you move to a cheaper rate. You have to keep on top of credit card providers as there are various ways you can pay extra charges on your card see this article credit card bills exposed for more info. What about your car? George |
| helpmenow | 03-03-2008 12:01 PM |
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Joined: 15 May 2007 Posts: 30 My Profile | Hey confused I was in your situation, first year of an IVA and now I am DWD. I got rid of my car bought a wee run-about at the market for £550. I have changed the oil and brake pads, well my next door neighbour did it, and so far no trouble. Insurance is cheap and if anything major goes wrong with it i'll punt it and get another one. Hang in there, it may be tough to start with but it's something you have to deal with. I can guarantee you'll sleep better and be less stressed. Hugs Helpmenow |
