Money Matters

barney_b · 18-09-2006, 16:21

A friend of mine has the following problem and I wondered what peoples thoughts were (I asked her and she doesn't mind me posting this)...

She has a car on HP costing her £250/month over 4 years (she's had it less than a year and paid around £10,500 for the car).
2 credit cards (£3400/£3000 minimum payments are £75/month & £25/Month) and finally a personal loan for costing her £200 a month with about £3000 left to pay.

She's feels swamped and although she can afford the payments she wants to reduce the cost of living so she can allocate more money clearing her loan & credit cards. The most obvious thing is the car but I believe she'll be almost £2000 short on the loan balance if she sells or PX's.

Any ideas???

gilesk · 18-09-2006, 16:26

Has she tried consolodating all the loans? This sometimes helps, also she could move her credit cards over to one that offers 0% for 6 months or so and keep doing this to get them down, SWMBO did this and it helped.

yaktrebor · 18-09-2006, 16:27

Have a look at MoneySavingExpert.com ad-free, free to use, Consumer Revenge! for help and advice.

If she can, get a 0% balance transfer credit card, this will give her 6 months of not having to pay interest on her existing balances.

She could them use this saved money to clear some off the debt.

Also, you have to be very careful with loans, as some have early repayment fees, it would be worthwhile asking for a settlement amount, before going ahead.

skodaw · 18-09-2006, 16:30

It's worth checking what interest she is paying on each debt, it may be worth then speaking to the bank to see if they can do a cheaper rate. Then hopefully the payments would officialy be less and allow her to overpay the loan to reduce the debt more quickly.

barney_b · 18-09-2006, 16:46

Good suggestions... I'll get her to take a look at the interest rates and print off the article for her. The last thing I want her to do is get further into debt by changing her car!

pixi · 18-09-2006, 16:49

She could try her local CAB as they are used to dealing with financial worries.

heresmo · 18-09-2006, 16:49

Questions I'd ask are: How much of being overstretched is due to the car? I'm thinking more about running costs rather than loan repayments. How much would be saved each year on insurance and petrol if the car were to be replaced with a more economical one. As said, how does this compare with all costs associated with giving the car back?

Re changing credit cards and loans, read the small print for upfront fees, other fees which don't sound much but add up to a lot over time. IOW look at the whole picture and work out the numbers before doing anything. Citizens Advice can offer this sort of help for when there are too many numbers to be able to see the wood for the trees.

Edit: Be careful of any advice you give (it's illedgal if you're not qualified) but also, your friend won't thank you if it goes wrong - better to steer your friend to people who know.

Best
Mo

***Neo_VR*** · 19-09-2006, 17:53

General advice "suggested"

All this from moneysaving expert...

See about getting a 0% on balance transfers credit card to take the balance of the two outstanding (virgin credit card is the hot one at the mo with 12 months 0% on blalance transfers OR, a Marks and spencers &more card, who have 3.9% for the life of the balance (would be better if there was no way it would be paid off in a year)
Same with the loan, if its not low interest (around 6%) then consider switching, but bear in mind that loan companys sometimes charge for paying off early, and this would need to be figured in to see if its worth transferring the loan.

The golden rule is this: always concentrate on paying off the highest interest rate debt first.. and try to always pay more (even if only a couple of quid) than the minimum payment on credit cards.

OldFlo · 25-09-2006, 15:34

Quote:

Originally Posted by pixi

She could try her local CAB as they are used to dealing with financial worries.

Be aware that the CAB can be a little too keen to suggest bankruptcy though. They're good at what they know, but they don't have much finesse with their advice and it sounds like finesse is what's needed here.

HTH, & best of luck to your friend.

heresmo · 25-09-2006, 16:26

Quote:

Originally Posted by OldFlo

Be aware that the CAB can be a little too keen to suggest bankruptcy though. They're good at what they know, but they don't have much finesse with their advice and it sounds like finesse is what's needed here.

HTH, & best of luck to your friend.

[my bold]

Your post does serve to emphasise that any advice offered should be assessed by oneself, or if not sure, get more opinions, especially before rushing into what looks like "a good deal" before making sure that all the fees/implications are fully understood.

Regards
Mo

johnjohnhealy · 25-09-2006, 16:39

Try URQuote

He's my brother so i'm obviously gonna be slightly biased, but he will give the best and most honest advice, he's very good at hs job.

His website will list all the loans available, the APR's and any advantages/disadvantages of each particular loan (i.e. early repayment penalties etc)

MC Bodge · 26-09-2006, 11:16

It always amazes me how some people manage to get into so much debt....

KenONeill · 26-09-2006, 13:33

Agreed with the advice to move the CC debts to a 0% transfer and use the interest saving to increase the rate of repayment, but, and this is important, destroy one or both of the old cards so she can't run up new debts on them.

Do not be tempted by a "consolidation loan", unless there's a genuinely lower interest rate on it, over the same term as the existing loan (compare final amount paid, not monthly payment, monthly interest rate or APR).

lozgti · 26-09-2006, 13:58

Quote:

Originally Posted by MC Bodge

It always amazes me how some people manage to get into so much debt....

Because we are pestered 24 hours a day and most people live on credit

I must get at least two or three credit card applications in the post every week,if not more.I rip them up

Currently being pestered by cold telephone calls re mortgages and loans.

I open my car mag and it 'snows' leaflets offering loans

Periodically get offers from Barclays to top up my barclayloan.No thanks! Paid off soon.

Suggest your friend follows the advice given.Gets rid of the debts slowly.DON'T go borrowing more !have bit left on my car loan and bit of Barclayloan and no credit cards.

Never again borrowing.Debt driven economy we live in.Will soon go very wrong

stumpy1 · 26-09-2006, 17:09

The property boom hasn't helped here either. Many of my friends re-mortgaged to the max to pay for home improvements, or cars, holidays etc. Interest rates go up a natch, and they are all panicking.

As it is though, the cost of living in this country is very high, and only gonna get worse.

18-09-2006, 16:21	#1
barney_b Skud Owner Join Date: Apr 2006 Posts: 435 Members Car: Fabia VRS Thanks: 0 Thanked 4 Times in 1 Post	Money Matters A friend of mine has the following problem and I wondered what peoples thoughts were (I asked her and she doesn't mind me posting this)... She has a car on HP costing her £250/month over 4 years (she's had it less than a year and paid around £10,500 for the car). 2 credit cards (£3400/£3000 minimum payments are £75/month & £25/Month) and finally a personal loan for costing her £200 a month with about £3000 left to pay. She's feels swamped and although she can afford the payments she wants to reduce the cost of living so she can allocate more money clearing her loan & credit cards. The most obvious thing is the car but I believe she'll be almost £2000 short on the loan balance if she sells or PX's. Any ideas??? __________________ My Fabia > Mikey the Pikey

18-09-2006, 16:26	#2
gilesk MadridBriskodia Join Date: Jul 2006 Posts: 1,044 Members Car: Thanks: 16 Thanked 10 Times in 10 Posts	Re: Money Matters Has she tried consolodating all the loans? This sometimes helps, also she could move her credit cards over to one that offers 0% for 6 months or so and keep doing this to get them down, SWMBO did this and it helped. __________________ who'd have thought it eh?

18-09-2006, 16:27	#3
yaktrebor Briskodian Join Date: Nov 2005 Location: Bakewell, Derbyshire, where the puddings come from. (That's tarts to foreigners!) Posts: 553 Members Car: Thanks: 0 Thanked 0 Times in 0 Posts	Re: Money Matters Have a look at MoneySavingExpert.com ad-free, free to use, Consumer Revenge! for help and advice. If she can, get a 0% balance transfer credit card, this will give her 6 months of not having to pay interest on her existing balances. She could them use this saved money to clear some off the debt. Also, you have to be very careful with loans, as some have early repayment fees, it would be worthwhile asking for a settlement amount, before going ahead. __________________ 'No more beer!' (unless it's GF) Last edited by yaktrebor; 18-09-2006 at 16:28.

18-09-2006, 16:30	#4
skodaw Briskodian Join Date: Jun 2003 Location: This area is under construction - please call back later :) Posts: 3,186 Members Car: Skoda Fabia vRS Thanks: 2 Thanked 9 Times in 5 Posts	Re: Money Matters It's worth checking what interest she is paying on each debt, it may be worth then speaking to the bank to see if they can do a cheaper rate. Then hopefully the payments would officialy be less and allow her to overpay the loan to reduce the debt more quickly. __________________ Dave '05 Silver Fabia vRS

18-09-2006, 16:46	#5
barney_b Skud Owner Join Date: Apr 2006 Posts: 435 Members Car: Fabia VRS Thanks: 0 Thanked 4 Times in 1 Post	Re: Money Matters Good suggestions... I'll get her to take a look at the interest rates and print off the article for her. The last thing I want her to do is get further into debt by changing her car! __________________ My Fabia > Mikey the Pikey

18-09-2006, 16:49	#6
pixi Naughty Pix! Join Date: Dec 2004 Location: Writing in these boxes is soooo last year! Posts: 6,307 Members Car: 06 Fabia vrs Thanks: 106 Thanked 93 Times in 51 Posts	Re: Money Matters She could try her local CAB as they are used to dealing with financial worries. __________________

18-09-2006, 16:49	#7
heresmo Briskodian Join Date: Jan 2005 Posts: 12,554 Members Car: Thanks: 50 Thanked 143 Times in 123 Posts	Re: Money Matters Questions I'd ask are: How much of being overstretched is due to the car? I'm thinking more about running costs rather than loan repayments. How much would be saved each year on insurance and petrol if the car were to be replaced with a more economical one. As said, how does this compare with all costs associated with giving the car back? Re changing credit cards and loans, read the small print for upfront fees, other fees which don't sound much but add up to a lot over time. IOW look at the whole picture and work out the numbers before doing anything. Citizens Advice can offer this sort of help for when there are too many numbers to be able to see the wood for the trees. Edit: Be careful of any advice you give (it's illedgal if you're not qualified) but also, your friend won't thank you if it goes wrong - better to steer your friend to people who know. Best Mo __________________ Last edited by heresmo; 18-09-2006 at 16:53. Reason: Just a caution

19-09-2006, 17:53	#8
*Neo_VR* Om nom nom nom Join Date: Feb 2003 Location: Manchester Posts: 12,480 Members Car: A White Car Thanks: 79 Thanked 175 Times in 124 Posts	Re: Money Matters General advice "suggested" All this from moneysaving expert... See about getting a 0% on balance transfers credit card to take the balance of the two outstanding (virgin credit card is the hot one at the mo with 12 months 0% on blalance transfers OR, a Marks and spencers &more card, who have 3.9% for the life of the balance (would be better if there was no way it would be paid off in a year) Same with the loan, if its not low interest (around 6%) then consider switching, but bear in mind that loan companys sometimes charge for paying off early, and this would need to be figured in to see if its worth transferring the loan. The golden rule is this: always concentrate on paying off the highest interest rate debt first.. and try to always pay more (even if only a couple of quid) than the minimum payment on credit cards. __________________ ColGod the UberMod ,___, [O.o] /)__) -"--"- ORLY??

25-09-2006, 16:39	#11
johnjohnhealy Briskodian Join Date: Jul 2005 Location: UK south east Posts: 2,428 Members Car: Superb 130pd Thanks: 1 Thanked 13 Times in 12 Posts	Re: Money Matters Try URQuote He's my brother so i'm obviously gonna be slightly biased, but he will give the best and most honest advice, he's very good at hs job. His website will list all the loans available, the APR's and any advantages/disadvantages of each particular loan (i.e. early repayment penalties etc)

26-09-2006, 11:16	#12
MC Bodge Briskodian Join Date: Dec 2005 Location: North West England Posts: 899 Members Car: Octavia vRS Thanks: 0 Thanked 1 Time in 1 Post	Re: Money Matters It always amazes me how some people manage to get into so much debt.... __________________ Mk1 Octavia vRS. The thinking man's Hot Hatch. PS. Give Cyclists Room! We're quite vulnerable. If I can slap your window, you're too close

26-09-2006, 13:33	#13
KenONeill Briskodian Join Date: May 2006 Location: Normally in Scotland! Posts: 11,165 Members Car: Octavia TDi110 Thanks: 63 Thanked 558 Times in 546 Posts	Re: Money Matters Agreed with the advice to move the CC debts to a 0% transfer and use the interest saving to increase the rate of repayment, but, and this is important, destroy one or both of the old cards so she can't run up new debts on them. Do not be tempted by a "consolidation loan", unless there's a genuinely lower interest rate on it, over the same term as the existing loan (compare final amount paid, not monthly payment, monthly interest rate or APR).

26-09-2006, 17:09	#15
stumpy1 To be Confirmed Join Date: Jun 2006 Posts: 323 Members Car: Thanks: 0 Thanked 0 Times in 0 Posts	Re: Money Matters The property boom hasn't helped here either. Many of my friends re-mortgaged to the max to pay for home improvements, or cars, holidays etc. Interest rates go up a natch, and they are all panicking. As it is though, the cost of living in this country is very high, and only gonna get worse.

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