Back to college with debt?

[iacabu]

I think this is the most relevant forum but please move if required...

I’m going to be quite open about my personal situation in this thread, as I don’t think it is worth posting for advice if you don’t know the facts if you reply.

I currently have the following debt:
Loan - £8000
3 credit cards - £3450

Monthly these equate to around £330. I also have around £110 in house bills, £45 for Sky and £40 phone.

I’m also responsible for the payment of another £1000 credit card, but that isn’t in my name.

So all this is approx. £525 per month, before food, petrol, insurance, miscellaneous charges/bills etc.

Currently my wage is £1250 per month.

However, among a few career ideas is the merchant navy. I have applied recently and have a pre-interview ‘chat’ next week. Now if I was offered a place it would be a January 14 start at college. They will pay a ‘wage’ and from what I can find, will be around £600pm (although will confirm at later stages of application process).

So my question is this, based on the above, do I have options?

It doesn’t sound such a good question, but I think you’ll understand what I’m getting at.

I will also have to look into student loans which may be able to pay the credit cards off??

Can anyone offer any advice, it would be much appreciated.

[scottri]

Using your existing job/income apply to consolidate your existing loans into one bigger one over a longer period. Several banks are doing them at 5% ish which will probably be cheaper than you are paying now. Assuming you have a good rating.

£12.5k over 7 years is £176 a month. Pay that, and other bills with your £600 income and spend the rest on beer.

Get rid of the car/sky etc.

I've made the assumption you are living at home? You don't mention rent/mortgage.

Edited by scottri on Thursday 17th October 16:57

[Froomee]

Try delaying your start and paying the credit cards off before you start. Then re-negotiate the loan you have possibly.... I.e. extend the term.

[iacabu]

Thanks for the replies, credit rating probably isn't so good at the moment but I can always go and discuss at the bank. I think a part time job for the next few months is on the cards

[Haggleburyfinius]

iacabu said:

Thanks for the replies, credit rating probably isn't so good at the moment but I can always go and discuss at the bank. I think a part time job for the next few months is on the cards

You definitely need to do something proactive. That level of debt to income is unsustainable even if you don't go back to college.

Think of it of short term pain for realising your goals

[trickywoo]

Drop the Sky and £40 phone for a start!

[Teddye4687]

Well, the first thing to do is to shift the debt to minimalise interest rates.

Assuming you're paying interest on those credits cards at the minute, I'd suggest taking up another Credit Card which offers 0% on balance transfers for the longest period possible. There were some 18 month ones not long ago. Golden rule however, do not spend on it and do not miss a payment. If you do, there are penalties and the % tends to revert back to a 15% or something.

Assuming 3% balance transfer fee for the new card, and a current rate of £15%, over 18 months this could save you over £400..

With regards to the £8k loan, this will depend on the current agreement and interest rate. Are there penalties to shift the debt or repay early, and what is the %? You could take up an MBNA credit card which again offers 0% BT for a good period with a 3% one-off payment, and they send the money to your bank account in cash, which you can use to pay off a chunk of that loan which is undoubtedly a higher % rate. They'll probably limit the amount to £3-4k though, but every little helps.

I'm not a financial adviser, and does require you to be cute with the timings and maths. Take a look at money saving expert.

Edited by Teddye4687 on Friday 18th October 16:36

[Simpo Two]

trickywoo said:

Drop the Sky and £40 phone for a start!

This. Saves £1020pa.

That's the same as me sending you a cheque for £1,020 every year.


The quicker you get out of this hole the less it will cost you.

[iacabu]

Simpo Two said:

This. Saves £1020pa.

That's the same as me sending you a cheque for £1,020 every year.


The quicker you get out of this hole the less it will cost you.

I'll just take the cheque thanks


I didn't actually want the phone, I was going to get a £10 a month sim but it's my girlfriend's old contract which we can't get out of so thought might as well use it for the last few months.

Obviously I don't have to continue with Sky when 12 months is up so I'll see when the time comes. I think it will be about 3-4 months in to the training (if I get offered a place)