Is this a worrying debt or am I bring anxious again?

[hereforit]

I am a hugely anxious person. Single mum to a 9 month old. Just out of an abusive relationship. I have an overdraft debt of £1600, and my career development loan still has 800 which needs paying. The repayments start again in October and I won't be able to afford them now I'm on my own (financially abusive ex wouldn't have helped anyway but I've had to drop my hours massively and balance out with childcare costs). The loan was 10k so think I've done pretty well to pay this much off in 4 years.

I will be on about 24k ish when I go back to work but have a big childcare fee. Not much left after all outgoings.

Is a loan of £2400 as a single mum bad? I feel embarrassed about it and just want it gone. The overdraft interest is really high and I'm struggling to pay it.

Would I be best of getting s consolidation loan? I was thinking about getting one over 5 years and trying to pay it off early.

Help!

Yes, I'm up at 1am worrying about this.... I should definitely be sleeping!

I'm pretty in awe of you paying off so much of your loan in four years.You are obviously very careful with money. If the interest on your card is so high moving it to a lower interest loan would definitely be a good idea. We need to get you to the point where you have a plan so you're not lying in bed at 1am worrying about this .

I don't think £2400 is massively high...I'm willing to bet a lot of people have much higher debts. But I guess as a proportion of your income it is a lot. Maybe you could approach one of the debt charities to see if they can help you negotiate getting the interest freezed.

Thanks @dickybow321 - I am pretty good with money. My debt is due to things mainly out of my control or to hopefully benefit me in the future. Like my master's degree. I'm training at the moment, but my wage will go up hugely in around 4 years. I'm in it for the long haul but want this debt gone asap whilst also being able to provide for my son 😥

I worry that freezing interest negatively affects credit ratings as it implies you can't afford to pay

I have heard Christians against Poverty (you don't have to be a Christian) are really good, can give advice and help you. Might be worth chatting to them? Good luck.

I find that finding the figure you are short by means you know what you are dealing with.

Are you going to be £50 short per month or £500.

Seeing where you ca

@oliversmumsarmy what do you mean? I could technically leave the OD debt and let it get bigger or just pay the minimum which is what I've been doing, but the CDL is £200 a month for 3 more months which I doubt I could afford comfortably (unless my ex miraculously starts paying maintenance)

Don't quote me but I can't imagine freezing interest negatively impacts credit ratings...credit reports just show whether you have missed a payment or not. Have you been on the money saving expert website? Their debt boards are really good. If you ask the question there I'm sure you'll get excellent advice.

I haven't, no. But I will. I just want s plan where I have a certain affordable amount going out every month and I know exactly how long it will be until my debt is gone. Can't bloody wait!

Just looked at Christians against poverty - they look brilliant, if you live in a different area. The don't cover where I live sadly.

Why don’t you see if there is a credit union near you who can offer you a low interest loan?

I was meaning if you have an agreed overdraft limit I would keep within that and work on paying the loan first

Then worry about the OD later.

Money worries are awful but your debt is relatively small and you have a good attitude toward it.
Do not consolidate. You will just be replacing debt with more debt.
Get yourself over to Martin Lewis's Money saving expert/ debt free wannabe site, post a statement of affairs ie. income and outgoings, sit back and wait for non judgemental, very useful advice from people who've 'been there, done that'
Best of luck. Mx.

I think you've done amazingly well. I was left in well over 20k of debt by my DS dad, all in my name so legally mine. I sought free legal advice and she said though you have proof he has accepted its his there is no guarantee he will pay. That's when I cut my losses. Unfortunately that also coincided with him cutting all contact with his DS. I had to get a loan to consolidate it all together or else I would never have managed.

I am over 3 years in and have less than 2 years left. The debt upsets me massively but I am also proud that I am paying it and I haven't let it affect my credit rating. My DS is still only 5 so it will be gone when he is still pretty young. I've paid over half back so far and I admit it's tough on us at times because once it's paid every month our money is so so limited, I know it won't last forever.

You are doing amazing. Do what you feel it best. Trust me it's hard but it will come to an end x

It might be worth calling and seeing if they can reduce the repayment amount in October because you’ve had a change of circumstances. It’s always worth chatting to someone to discuss options.

Hi OP. If you’ve paid off credit in the past you should have a good credit rating. Why not try and get a 0% credit card? Santander do a good one. I got 3 years on mine but even if you got it for less than that it would make the payments less ie about 170 a month over a year?

Sorry just saw it was a loan and overdraft.

You could get a money transfer from a credit card then pay off the overdraft/loan and then get a balance transfer for the money transfer?! It is a complicated way of doing it and you’d need a good credit rating and there would be fees. It might not be feasible but is one way around it. Also some money transfers have interest free periods from the day they are made.

Go to your bank. Ask them to freeze the interest on your overdraft and offer a much lower repayment that is more affordable. Most are very good at providing financial advice, if approached.
Don’t start wheeling and dealing with different loan accounts without comprehensive financial advice and support.

I think you've done great so far. And because you are clearly sensible with money, I think consolidating in some way would work for you. For eg, move the whole lot onto a 0% credit card (cut up the actual card though!) and then make the repayments you can afford.

Overdraft fees are high and having an overdraft in the first place pushes you further into debt every month. It's a good idea to get rid of it. Also second money saving expert for advice.

They will only freeze the interest if you go into default and that will damage your credit rating. No lender is going to let people off the interest that they have agreed to pay without the borrower giving something back.

Best course of action is to probably try and get a 0% credit card - there are money transfer ones that are best to pay off your overdraft. Look on Monesavingexpert to see what is available that you qualify for. Also go through their money makeover and do everything that is relevant, including checking what benefits you are entitled to help with the cost of childcare and minimise utilities etc, to make sure you have as much disposable income as possible.