Dealing with Debt, General Advice & Opinions

Hi

Long-time loiterer of the forum(s), first-time poster. My situation is not in any way dire, at least not compared to that of other posts I have seen on here. I am however caught in what I deem to be the dreaded debt-cycle and have multiple "Lines of Debt" across various financial institutions. Poor past financial miss-management on my part, but I have since learned the error of my ways and am trying my best to take actions to rectify all and overall a better financial future.

Advice welcomed. Opinions appreciated. Ideally, I want to eliminate all this debt as soon as practically possible, save, perhaps, my Car Finance Agreement, as that's Consumer Hire Purchase and most likely more complex to deal with. I don't mind leaving that on its own for now.

I am paying at various times of the month to different lenders, at varying interest rates.

The thing that I come up against the most is that when I mention, to say, my own bank or other institutions that I would like to explore a debt-consolidation loan, they nearly slam the phone down. None of them want to take on the legacy debt it seems, or at least that's my experience with it anyway.

Get rid of the car and buy a cheaper one. Put the money saved towards your other debts. Pay off the credit cards first.

You want to sort out your finances,yet you've added 17 k in the last 6 months?
Is this accurate?
The only legacy debt appears to be 2.5 k.
Do you need such an expensive car?
What's your income/other expenses?

The car was added 1.5 years ago. This is hire purchase, so I cant sell the car. I could, in theory, give it back but I would end up still owing money (the balance on the loan vs the value of the car) - then I would be left without a car. I depend on a car to live.

All of my debt (apart from my car, and Dad's Funeral costs) is a "robbing Peter to pay Paul scenario"

What age are you?

What is your income?

I am not sure that there is a financial engineering solution to your needs.

The solution is to cut your expenditure or increase your income.

If you do generate a surplus, attack the credit card first. Can you clear one of the credit cards and then cut it up?

You owe the credit union €7,000. Do you have shares in the same credit union? Ask them to set the shares against the loan. Kick up a fuss if they don't. Ask them to take over the credit card debt and cut up the credit cards.

If you have no hope of repaying your loans, consider a Debt Settlement Arrangement or Debt Relief Notice
[broken link removed]

Brendan

Thank you for the reply.

25

40k PA

Ideally, everything would be structured under one loan, not multiple loans with different interest rates, but so far no one will touch them. I have (for the most part) good repayment history, its just the amount of different loans that I have.

I have already gone through the "rough patch" of self-punishment, I was an idiot with money in the past but have finally had my wake up call. Just need to try and fix it all.

I have about 2.5K in shares, They are "locked" on the loan.

I do have hope, just trying to best work it out.

Thanks again

I don't think a coverall loan is the answer. If you're serious about it you could probably come up with a plan to clear your debts in maybe 18 months, except for the car (rocket ship?), although you could hand that back then under the [broken link removed] if you wanted and buy a cheap runaround.

You'd need to do the usual spending diary to see where else the money you earn is seeping away. Then try to identify where savings can be made to direct at the loans. Obviously you'd want to target the credit cards first and close one of them when paid off. If it was me I'd pay off the personal debts before the bank/CU loans.

Without judgement on what got you to where you are.

Excluding your nil rated personal debts, your average interest rate is well over 9%, which is high, even for unsecured debt.

Your debt to income ratio is high, so you might have trouble refinancing.

1. Move your AIB credit card to the 'click' product. Rate is a little over 9%. Ask if you can also do a balance transfer from BOI.
If not, ask BoI to change the credit card to a loan. As well as the high rate, your paying stamp duty on 2 credit cards.
2. Next, tackle the CU Loan. Your net loan, minus shares, is only 4250, but you're paying interest on 6758. Your effective interest rate is over 14%. Brendan has provided advice above.
3. Is this the best rate you could get for personal loans? From what I can see KBC should have a better rate if you move your current account. Ask if they will refinance the AIB loans (Your AIB loans are variable rate, and there's no penalty for early repayment).