I NEED DEBT ADVICE Please help me! I have debt totalling around ten thousand pounds.?
The debts include a £5000 (15.9%apr) loan (really 6700 once it is paid off) a £1500 overdraft with natwest(18%apr) house of fraser store card with £400 (29.3%apr) and a natwest creditcard with £400. I also have about £600 in little debts. I really don't know what to do I am a single mum on benefits although I have just got a job for a few evenings a week which will help but at the moment i'm living on a credit card and I don't know what to do I don't want to go down the iva or bankruptcy as that would cause more problems and I'm still young and don't want to ruin my credit score anymore than it is. I have tried to consolidate the debts but as I have a poor credit rating I can't get any decent deals and I don't want to borrow even more money than I already owe. Does anyone know of a REPUTABLE company that will give me a loan for a lower apr than the one I have already or anyother advice. I have spoken to debt counsellors but I don't class as owing enough for any real help.
- 1 decade agoFavorite Answer
I have about the same amount of debt as you and I am now with Consumer Credit Counseling Services. Basically I send them money every month and they distribute it to each of my credit cards. They were also able to lower all of my interest rates a lot. I will be debt free in about 4 years compared to probably 20 if I would have kept paying the minimum on my cards. The thing is you have to STOP using your cards to make any head way.
- 1 decade ago
The first thing to do is STOP the over spending, You can't borrow your way out of debt so a consolidation loan is useless, so are "credit counseling services", Think about it, If I asked you to give me all your money and I would pay your bills for you for a fee, would you do it or would you think "Why can't I do this myself and save the fee?" The truth is you can, it takes a dreaded thing called a BUDGET. Spend the next months bills on paper, before the month gets here. The paper then becomes a contract. The only money you spend for that month is what is on the paper. It must also be ZERO based, meaning there is no room for error, if you budget a certain amount for "food" and you go over that amount then you must go back and change the budget. If you overspend from one area then the money must come from another area. Second thing to do is do what ever it takes to build a temp. emergency fund (around 1000 pounds).
The third thing to do is take care of the " 4 walls" (Food, Shelter, Utilities, Transportation) FIRST. After this, rank your debts smallest to largest (APR doesn't matter) then pay all you can on the First while paying minimums on the remainder. Once the smallest is gone then you roll the amount you were spending on it to the next debt (plus its minimum). Continue this until all the debts are gone. Sorry, this is long but it really isn't an easy question with a magic pill answer.
- Anonymous1 decade ago
You can do this on your own. The credit places are not really that great. I would start with Joe Sangl. He is a personal finance adviser and blogs every day about finances. He has a series about getting out of debt and tools to help get your finances in order.