Loan consolidation

S

Spud81

New Member
Messages
2
Personal details

Age:41
Spouse’s/Partner's age:32

Number and age of children: Three, 18yo, 4yo and 6 months


Income and expenditure
Annual gross income from employment or profession: 120k
Annual gross income of spouse:14k

Monthly take-home pay 5200

Type of employment: Private sector

In general are you:
(a) feels like I am spending more than you earn at times.


Summary of Assets and Liabilities
Family home worth €450k with a €130k mortgage
Cash of €1500
Company shares : €20k


Family home mortgage information
Lender Avant
Interest rate 2.1
Fixed 10 years

Other borrowings – car loans/personal loans etc

24k credit union loan 8.1%
3.5k ptsb loan 13.4%
1k Humm loan for phone
 

Other savings and investments:

Do you have a pension scheme? Yes

Do you own any investment or other property? No

Other information which might be relevant

Life insurance: yes


What specific question do you have or what issues are of concern to you?

I want to consolidate my loans and want to borrow 8k for a family holiday.

I am looking for best rate/Lender for loan.

Once I have consolidate loan, I want to pay it off quickly.

My company shares will start maturing this time next year.

Any help advice greatly appreciated.
 
Spud81 said:
Do you have a pension scheme? Yes
Click to expand...
How big is your pension fund?
Spud81 said:
Annual gross income from employment or profession: 120k
Annual gross income of spouse:14k

Monthly take-home pay 5200
Click to expand...

This doesn't quite add up. You would want to be making massive pension contributions for €134k gross for a couple to work out at €62k net.

How much are your contributions? Is there employer matching?


Depending on size of fund and your contribution rate it might make sense to pause contributions for a while to pay down the high-interest debt.
 
Spud81 said:
In general are you:
(a) feels like I am spending more than you earn at times.
Click to expand...
This is the key issue that needs to be analysed and understood - e.g. using a spending diary or by going back through bank/card transactions. Even with 3 kids and a modest mortgage it's strange that you are seemingly overspending, borrowing at high rates, and not really saving on €134k p.a.

Personally, I reckon that you need to think carefully about this before consolidating existing loans and borrowing even more. Otherwise you're just exacerbating what looks like a concerning household finances situation.

Edit: post crossed with @Brendan Burgess's but the gist is the same.
 
Apologies, some of my figures may be out.

I salary forgo for 7 months of the year also.

Pension at the moment is 22k

I included health insurance and bonus in the gros income.

I borrowed last year for home renovations and probably should have borrowed more as I ended up using quite a bit of monthly income finishing off the works.

We are long overdue a family holiday and we are bringing a grandparent.

I should have also mentioned the holiday is 6k and I need 2k for car repairs.

Partner has been out on maternity leave also so her wage is down.

I thought I was doing OK by fixing the mortgage, we have just had a few unexpected expenses with car repairs and old house.

I just want to consolidate loans and get holiday out of the way and get back on our feet, knock out the debt and start saving.
 
Spud81 said:
Pension at the moment is 22k
Click to expand...

What does this mean?

If that is the amount you are contributing, then stop.

You can't afford to borrow at 13% to contribute to a pension.

You should only make pension contributions enough to maximise the contribution from your employer.

Brendan
 
Spud81 said:
Pension at the moment is 22k
Click to expand...
Specifically:
  • What is your contribution?
  • What is the size of the fund?

Brendan Burgess said:
Sorry to break the bad news, but you can't afford to spend €8k on a holiday.
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I'm not so sure. There is household gross income of €134k and wealth three times in excess of debt. That's pretty healthy for a couple of that age.

An immediate and obvious fix is to sell €20k of shares to pay off most of the high-interest debt.
 
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Spud81 said:
Apologies, some of my figures may be out.

I salary forgo for 7 months of the year also.
Click to expand...
I don't understand what this means.
But, ultimately, it probably doesn't really matter that much because @Brendan Burgess has already nailed it with his feedback.
You need to sort your finances out before going on a very expensive holiday, no matter how much you think that you deserve it.
If you ignore such advice then you're just digging an even deeper financial hole for you and your family.
 
NoRegretsCoyote said:
I'm not so sure. There is household gross income of €134k and wealth three times in excess of debt. That's pretty healthy for a couple of that age.
Click to expand...
But they're spending more than they earn, don't seem to know why, and racking up expensive debts in addition to the mortgage?
That needs to be analysed, understood and addressed or else it's just going to get worse.
An immediate and obvious fix is to sell €20k of shares to pay off most of the high-interest debt.
Click to expand...
I agree, but while also understanding where all the money is going and why.
Borrowing €8k for a holiday in the circumstances as described so far would be very irresponsible.
 
ClubMan said:
Borrowing €8k for a holiday in the circumstances as described so far would be very irresponsible.
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I agree they don't need more debt interest.

But it’s a good level of income and wealth and I dont think an €8k holiday is an extravagance.
 
I could have written this post in my late 30's.
Finances all over the place. No real plan.
Basically you are living beyond your means. Good income and your wife probably has potential to increase more.
Pension I am not sure where you are but you have 20ish years to get that sorted which coincides just after your two youngest kids college phase. So a big squeeze there.

Your loans:
24k credit union loan 8.1% :eek:
3.5k ptsb loan 13.4% :(
1k Humm loan for phone:oops:
You need to clear these immediately with the 20K shares and really going at them to clear this year.
You cant afford to go on holiday or consolidate anything. You really will be adding fuel to fire if you add more loans & interest.
Clear loans then save for holiday but that might not be this year.
You should also do a deep dive into where day to day cash is going as your salary is pretty good.
Savings - you need 6 months built up of expenses.
Do you have salary progression possible?
Have you thought about college funds? Is 18yo going to college or is there a cash requirement there?

I really would not go and get a loan.
 
I fully agree with these three key points....

ThisisMax said:
- You need to clear these immediately with the 20K shares and really going at them to clear this year.
- You cant afford to go on holiday or consolidate anything.
- You should also do a deep dive into where day to day cash is going as your salary is pretty good.
Click to expand...
 
not sure what kind of holidays people are booking if they think 6k is extravagant for a family of 6 (incl the grandparent)

anyway it appears the the renovations have had an adverse affect on your cashflow, id forget about consolidating loans, just sell the shares and clear them off and make a proper spending plan, what lead to the 1k humm loan on a phone for example?
 
You have dug yourself into a little bit of a hole, but you are a high income household and can get yourself out of it quickly enough. Cut spending, prioritise paying off the expensive debt, and sell the shares to help with this when you can. It makes no sense to borrow at expensive rates, only to use the extra funds on a holiday. When you are back on track, you should be more than able to save the funds needed out of your high net salary.
 
The clue is in the name CONsolidation.
Many people CON themselves into thinking a consolidation loan is the answer or a fresh start. It's not. Chances are you will run up the loans/buy now pay later debt again and be back to square one looking for a CONsolidation loan again to tidy up your debts.

Stop spending, cash in your shares and clear your debt. Keep track of where your money is going.

Best move you made was getting the fixed at 2.1 for 10. That was a very good move.
 
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