Debt!! Anyone else?

[Zesmaster]

Hi,

is anyone else dealing with unsecured (non mortgage) debts of 30k+? I’m looking for moral support!!

please can I ask that the debt free/debt averse folks don’t hijack the thread- I hope to be in your position asap, but that’s not what the thread is about.

my current unsecured debts are an eye watering 39k against household income of £102k.

anyone else similar?

If it is all on 0% on your income that is manageable.

I have 10k on 0% credit cards and aim to pay it off by August 2025. 60k household income both early retired but can dip into work if needed. However, I do have the money in investments too which will cover the debt should I need it.

I use debt all the time to fund stuff.

Have you made a plan?

What are the interest rates?

Speak to Christians against poverty or Stepchange. They can help you to sort through your debt, prioritise and look at your budget.
How have you accrued that amount? Holidays? Car loan? You’ll need to tighten your belt but it sounds like you have the means to get on top of it.

Have you looked at Dave Ramsey on YouTube? And Meaningful Money.

Great resources - very motivating.

Dave Ramsey recommends the Snowball method. You tackle your smallest debt first.

Debt is not a problem as long as it can be serviced. Credit is a useful tool. Don’t panic.

I second Christians Against Poverty, their money course is really useful.

My debt wasn't as big but it was getting to the stage I was paying the minimum off my various credit cards and then using it as soon as it was cleared. Every month was so miserable as I had no money once all minimum payments had been made, my mum would help me out which made me feel even more shit, my credit was fucked and I had no life and was sewing up my bras! I hid it all well too no one would know if they saw me.

It took a couple of years of regulary paying things off but I was able to get a loan which I used to pay all but the smallest debts off and now I just leave them in the background paying off above minimum a month, even that along with the loan repayment gives me enough money to actually live on and have a life (now I just need to re-find one).

This.

OP, are you servicing the debt so far? Are all payments made on time?

Yes I’m overpaying massively to reduce it asap. It’s not all 0% sadly

Yes 100% up to date on everything. I’m snowballing it as it’s not all on 0%

I think the key question is what was it spent on?

If it's covering maternity leave, redundancy, studying, paying for a new kitchen, new roof - the type of expenses incurred as a result of a one of situation or purchase - it's easier to get a handle on.

If it's consistent lifestyle creep and overspending then paying it back requires a total reset of your relationship with money. That is harder.

Still achievable, just requires greater change.

No judgement here. 13k on interest free credit cards so whilst I'm uncomfortable with the figure, it's manageable. My concern is when these interest free periods come to an end will I be able to get more interest free!

The bit that's not 0%, what % is it and can you get it 0%?

I'd join the money saving expert debt free wannabe boards. You'll get more informed answers and help with budget there.

The top tip for budgeting is included everything.

Most people go wrong in only putting in the regular monthly expenses. They forget car maintenance, emergency fund, Christmas, birthdays etc. And this is where things get whacked on a credit card and the cycle begins.

There's really good templates on MSE to help you include everything.

Then you're doing it all OK! Don't panic, it sounds like you have it under control.

£17k / £40k 0% loan from my parents (£200 pm)
£11k / £22k 3.3% loan First direct (£326 pm)

Income £33k, mortgage free though so totally manageable

As long as your debt was deliberate and well thought out then it's fine, the issue is if it's just lifestyle creep, addictions like shopping or need for the newest versions of things.

Download Debt Payoff Planner, put all details in there and it will workout the best way to pay it off, you only need the free version. You get some satisfying graphs to show your progress.

Sadly only a small proportion is on 0% with. I chance of this changing for a while. I’m having to snowball the highest interest ones to make the most impact

@Zesmaster I would ask the mods to move this thread to the Money Matter’s topic.

You sound to be making good inroads with the snowballing.

Have you done a full budget of what you are spending? Not just regular monthly costs but also annual ones such as insurance, presents, holidays, dental etc. ?
This can help you identify spare £.

It all depends if it's affordable.
Obviously higher interest compounds interest.

Stepchange are very good - freezing interest rates etc with lenders BUT that comes with debt management plans - which will lead to debt being paid off but you have to set out your income, expenses and live within a tight budget.

All depends on how you feel about the time it will take to pay it off, interest building up and defaulting.

A you break it down for us OP? I suspect we have similar taking into account car loan and credit cards etc.

*can

We took out a personal loan of 20k to pay for repointing the house plus our car loan and credit cards. If it's affordable and on a regular monthly payment it will get repaid, try not to panic.

we don’t need to enter into any sort of debt payment plan, DMP etc. I wouldn’t want to trash our credit rating. We’re working on a 3 year repayment plan

So really you're fine then?
Affordable repayments
Targetting higher interest
Paid off in 3 years.

I would look at how you got into debt in the first place - been there, done that and don't plan to ever owe anyone any money ever again.

Still got a little left, soon to pay it off, then need a new bathroom (leaks) so will go in debt again, but it’s all manageable, do a project, pay it off, do the next. Most on 0% card out a 1% loan. Very aware if we lost a job or car dies it could get messy if we let debt get too big so keep it under control. Also aware kids only going once, so don’t want the full Dave Ramsey.

Can you consolidate to one loan so it's less interest overall?