Financial advise
Discussion
First a bit of an overview.....
Over the past couple of years I managed to run myself into a fair amount of debt (about £35-40k). Mainly down to the car loan and running costs. Also I was a few grand in debt before I took the car loan 30 months ago.
Also, I've changed job and become self employed, which to begin with forced me to live off credit cards until some money started coming in.
Work-wise, at the moment, it's looking pretty good, lot's of guaranteed work coming in and it's looking like it'll be really busy for a year at least (taking £4k-£6k into the business per month, and paying myself as much as poss!!) Normally it's half that.
So I've decided it's time to get myself debt free, because at the moment I'm paying huge amounts in interest and I can't really see light at the end of the tunnel.
My debts are as follows
Loan 1 - £16000
Loan 2 - £8500(ish)
Card 1 - £8000
Card 2 - £3800
Card 3 - £887
------------------
Total - £37000ish!!!
------------------
So looking pretty bad I guess!! But what’s sickening is that I pay about £1000 on these every month and they never really seem to go down!!
Loan 1 is a flexible loan and every time I get a bit broke I take a bit more out of it - very bad habit!!!
Because of me swapping between jobs a lot recently, I'm not sure that anyone will be that willing to give me a loan to consolidate it all. Also I'm NOT a homeowner!!
So my thought is, my mum (bless her!!) has offered to get a low interest loan (for about £30k) out in her name, as she has no debt other than paying off £150 a month on the mortgage!! Also I'm flogging the TVR for about £7.5k too. That will pretty much cover everything. Is there any reason why this is a bad idea??
I'd set up a direct debit to her account every month, and I can't see any point in the future I won't be able to pay it. I've always made my repayments on time!!
To those who say I'll just get in debt again, you’re wrong!! I'm going to make a huge effort to pay off this loan ASAP, and also with the loans and cards off my back and just one payment of about £500 to mum, I can start saving for a house. I serious cannot wait to lift this burden from my back.
Sorry if this goes on a bit, but just want to know what others would do in my position.
Cheers chaps...... Dan
Edited for spelling!!!
>> Edited by _dan_ on Thursday 11th August 00:33
>> Edited by _dan_ on Thursday 11th August 00:35
Over the past couple of years I managed to run myself into a fair amount of debt (about £35-40k). Mainly down to the car loan and running costs. Also I was a few grand in debt before I took the car loan 30 months ago.
Also, I've changed job and become self employed, which to begin with forced me to live off credit cards until some money started coming in.
Work-wise, at the moment, it's looking pretty good, lot's of guaranteed work coming in and it's looking like it'll be really busy for a year at least (taking £4k-£6k into the business per month, and paying myself as much as poss!!) Normally it's half that.
So I've decided it's time to get myself debt free, because at the moment I'm paying huge amounts in interest and I can't really see light at the end of the tunnel.
My debts are as follows
Loan 1 - £16000
Loan 2 - £8500(ish)
Card 1 - £8000
Card 2 - £3800
Card 3 - £887
------------------
Total - £37000ish!!!
------------------
So looking pretty bad I guess!! But what’s sickening is that I pay about £1000 on these every month and they never really seem to go down!!
Loan 1 is a flexible loan and every time I get a bit broke I take a bit more out of it - very bad habit!!!
Because of me swapping between jobs a lot recently, I'm not sure that anyone will be that willing to give me a loan to consolidate it all. Also I'm NOT a homeowner!!
So my thought is, my mum (bless her!!) has offered to get a low interest loan (for about £30k) out in her name, as she has no debt other than paying off £150 a month on the mortgage!! Also I'm flogging the TVR for about £7.5k too. That will pretty much cover everything. Is there any reason why this is a bad idea??
I'd set up a direct debit to her account every month, and I can't see any point in the future I won't be able to pay it. I've always made my repayments on time!!
To those who say I'll just get in debt again, you’re wrong!! I'm going to make a huge effort to pay off this loan ASAP, and also with the loans and cards off my back and just one payment of about £500 to mum, I can start saving for a house. I serious cannot wait to lift this burden from my back.
Sorry if this goes on a bit, but just want to know what others would do in my position.
Cheers chaps...... Dan
Edited for spelling!!!
>> Edited by _dan_ on Thursday 11th August 00:33
>> Edited by _dan_ on Thursday 11th August 00:35
Get rid of the debts as quick as possible. Sell the effin expensive TVR. promptly repay your Mum. Hey I'd have a TVR tomorrow, but with 35k in debt I couldn't sleep at night.
The most important thing (well, ONE of) is to be debt free when applying for a morgtage, and the longer you can show to be debt free is a good thing. Also the propensity to repay someone a debt, i.e. your mum for example college fees (don't say the real reason) also addds to your credit worthiness.
There is always light at the end of the tunnel. You've just found the switch. Be serious about your new financial propisition, take it on the chin, and work your way out of it.
Tried not to make it sound like a lecture. Sorry if it did
The most important thing (well, ONE of) is to be debt free when applying for a morgtage, and the longer you can show to be debt free is a good thing. Also the propensity to repay someone a debt, i.e. your mum for example college fees (don't say the real reason) also addds to your credit worthiness.
There is always light at the end of the tunnel. You've just found the switch. Be serious about your new financial propisition, take it on the chin, and work your way out of it.
Tried not to make it sound like a lecture. Sorry if it did
Dan,
You're on the right track. If your Mum can borrow the money as a mortgage that allows overpayments that would almost certainly mean a lower rate of interest for her (and you).
Assuming you have GBP30,000 to pay back at GBP500 per month it will take you 5 years just to pay off the principal - hang on in there!
You're on the right track. If your Mum can borrow the money as a mortgage that allows overpayments that would almost certainly mean a lower rate of interest for her (and you).
Assuming you have GBP30,000 to pay back at GBP500 per month it will take you 5 years just to pay off the principal - hang on in there!
I think you are on the right track. As much as it might sound hard, its the right thing to do - sort it out while you can. Delaying it could lead to restricting your lifestyle further - situations change and you never know what is round the corner.
To be honest, I was in a similar level of debt. Don't get me wrong as I could afford the payments, but its daft to have that amount of money going out each month with little to show for it. For example, if I were to have saved the money I had spent on interest I would have been afford pretty much any car....... bit depressing if I think hard...
But, to be positive though - I have managed to halve the debt already (if not more!). My earnings have increased and outgoings have decreased - add that to a further drop in outgoings come september, things are VERY positive. Its a nice feeling.....
Go for it - come out the other side feeling stronger and better!
To be honest, I was in a similar level of debt. Don't get me wrong as I could afford the payments, but its daft to have that amount of money going out each month with little to show for it. For example, if I were to have saved the money I had spent on interest I would have been afford pretty much any car....... bit depressing if I think hard...
But, to be positive though - I have managed to halve the debt already (if not more!). My earnings have increased and outgoings have decreased - add that to a further drop in outgoings come september, things are VERY positive. Its a nice feeling.....
Go for it - come out the other side feeling stronger and better!
Cheers for the replies there chaps.
The Tiv will up for sale soon enough (need to tidy it up a bit first though), which will pay off the nastier of my cards.
Spoke to my accountant and he is putting me in touch with a chap who give good advice on loans and organises them for people (not in a dodgy way!!
)
Works going well now, just paid off my overdraft (although it'll be back again in a week or two, just not as large hopefully!), so basically things are looking pretty good.
Cheers again, Dan
The Tiv will up for sale soon enough (need to tidy it up a bit first though), which will pay off the nastier of my cards.
Spoke to my accountant and he is putting me in touch with a chap who give good advice on loans and organises them for people (not in a dodgy way!!
) Works going well now, just paid off my overdraft (although it'll be back again in a week or two, just not as large hopefully!), so basically things are looking pretty good.
Cheers again, Dan
Gassing Station | The Pie & Piston Archive | Top of Page | What's New | My Stuff