# Small debt problem



## Danielle24 (1 Nov 2012)

Hi,

This isn't really a major problem, but it could be if I don't pull up my socks. I cleared a loan I had but because I have my loan account set up on my online banking profile I am able to take money out of it which I have done. Obviously doing this every now and again and having to pay it back every month has a snowball effect and I have to pay out more each month, stupid I know. Well I took a small loan out of the credit union with the intention of clearing my littlewoods account, getting the bank to close off the loan account altogether and keeping a couple of hundred to tide me over the month. I currently pay around €30.00 a month off my Littlewoods account and the credit union would be €95.00 so don't think its the best idea. I haven't cashed the CU cheque yet as I don't want to end up straddled with more debt. Any advice on what to do.

Here's the figures and status at the moment

Bank - 00

Loan - Currently owe €339.69, owed €80 of this by someone which i'll get next week

Littlewoods - €319. Paid small amount off it today

Credit Union cheque - €550

It's another 3 weeks until I get paid and I don't want to run up a load more debt on this loan and don't want to use all the credit union money if possible. Whats the best thing to do??


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## shigllgetcha (1 Nov 2012)

what is the interest rate from littlewoods and the CU? just to figure out which is cheapest


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## Danielle24 (1 Nov 2012)

shigllgetcha said:


> what is the interest rate from littlewoods and the CU? just to figure out which is cheapest[/QUOTE
> 
> Don't have the exact figures to hand but definitely the CU


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## vandriver (1 Nov 2012)

Littlewoods is 40%!


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## Bronte (5 Nov 2012)

vandriver said:


> Littlewoods is 40%!


 
Yikes !


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## Danielle24 (5 Nov 2012)

FYI

The annual percentage rate (APR) for this agreement is variable and is currently 39.9%. We may vary the interest rate at our discretion at any time, and will notify you of the variation, but will not increase it above a maximum of 43.7% APR. The current annual flat rate of interest is 34.01191%. Interest is charged on the daily current balance for the period covered by your statement at the simple daily variable rate of 0.09318% and is applied on each statement date.


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## aoc (5 Nov 2012)

work out what you have - what you need for rest of month.... do you have any spare?

is it a bank loan or an overdraft?


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## Danielle24 (5 Nov 2012)

Its a bank loan, i'm basically living off this until I get paid again. Due 80e this week and going to make that stretch.


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## Bronte (6 Nov 2012)

Danielle24 said:


> FYI
> 
> The annual percentage rate (APR) for this agreement is variable and is currently 39.9%. We may vary the interest rate at our discretion at any time, and will notify you of the variation, but will not increase it above a maximum of 43.7% APR. The current annual flat rate of interest is 34.01191%. Interest is charged on the daily current balance for the period covered by your statement at the simple daily variable rate of 0.09318% and is applied on each statement date.


 
They do make it very complicated for people don't they.  But this doesn't take away from the fact that the interest rate is still penal at 39.9% APR and not an organisation that one should have any dealings with if one cannot pay off each month.  

Can we clarify, you have a loan of 339 Euro, from where?  What has the 80 Euro go to do with this. 

Now you've borrowed 550 Euro from the credit union?

And you owe Littlewoods 319 Euro at a 40% interest rate

Do you know the interest rates on all your loans.  It would seem the best to immediately pay off Littlewoods and close your account with them.


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## Danielle24 (6 Nov 2012)

The loan is 439e from AIB. The 80e is money i'm getting that will tide me over so it means I won't have to take any more money out of this loan at the moment. My priority is getting this AIB loan closed off as its too easy to just take money out of it. 

I haven't cashed the cheque for the credit union yet. 

The cost of the credit union loan if I were to use it is €20.


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## WindUp (6 Nov 2012)

You would be better off using the AIB Loan to clear littlewoods immediately assuming that AIB is the more favourable rate


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## Danielle24 (6 Nov 2012)

It is more favourable but I don't want to keep it open as its too easy to just dip in to it.


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## oldnick (6 Nov 2012)

Now that's plain silly ! You want to close the cheapest loan source  whilst keeping the rip-off one open ? !
Do as Bronte and Windup suggest and clear Littlewoods. Today.


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## 44brendan (6 Nov 2012)

+1. You need to control your own expenditure habits. Unless you can do this you will always have financial problems.


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## Danielle24 (6 Nov 2012)

44brendan said:


> +1. You need to control your own expenditure habits. Unless you can do this you will always have financial problems.



I know this. That's why I am seeking advice to pull the reins in on this. I am the first to admit I am not the best at budgeting. I just thought that if I didn't have the credit available to me i'd have to pull my socks up


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## oldnick (6 Nov 2012)

Yes - so get out of the mire in the cheapest way you can -which means getting rid of rip-off loans first - and then address the (much) cheaper bank ones later.


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## Bronte (6 Nov 2012)

Danielle it's not the first time you've been on here, I'm not going to re read the posts but you need to tackle a few issues. So I'm going to again (sorry) give you some hard facts but also some solutions, but more solutions will depend on your replies

1.You love credit, you seem to think nothing of running up credit from all sorts of places and unfortunatley you always seem to get credit, to be fair to you you do pay them back, but this has a cost, it reduces the amount you have to spend and spirals out of control

2. You are not able to keep to a budget,

3. You do not seem to know what interest rate you are paying. Yesterday you were sure the credit union was less (a lot less) than the unbelievable rate of Littlewoods

4. You seem to think you are doing ok when you are not, you're not the worst mind. 

Solutions

1. Cancel Littlewoods, never ever shop via this type of method again, there is no need when we have Penneys.

2. Stop thinking that credit is a good thing

3. Learn to save before you buy impulsively

4. Learn to budget

5. Take a few months to get back on track and from then on you need to live within your means

6. Once you're within budget you need to save for the annual items of life, like a repair, car insurance etc.

7. After that you need to begin to be a saver for long term goals (house/car)

Some questions

If it's 3 weeks to payday what are you going to live on?

Did you take 80 Euro out of the AIB loan account and loan to someone else?

If your intention was to pay off Littlewoods and the AIB loan with the 550 cheque from the CU, and in addition have a couple of hundred euro, well how does that add up? 339 + 319 = 658. 

What is the interest rate on your AIB loan. The CU cheque that you must have just recently negotiated, what is the interest rate on that?

What is the actual repayments for the CU, you mentioned 95 euro and then 20 Euro.


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## Danielle24 (6 Nov 2012)

oldnick said:


> Yes - so get out of the mire in the cheapest way you can -which means getting rid of rip-off loans first - and then address the (much) cheaper bank ones later.



Yeah that makes sense


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## Danielle24 (6 Nov 2012)

Bronte said:


> Danielle it's not the first time you've been on here, I'm not going to re read the posts but you need to tackle a few issues. So I'm going to again (sorry) give you some hard facts but also some solutions, but more solutions will depend on your replies
> 
> 1.You love credit, you seem to think nothing of running up credit from all sorts of places and unfortunatley you always seem to get credit, to be fair to you you do pay them back, but this has a cost, it reduces the amount you have to spend and spirals out of control
> 
> ...




The cost of the credit union loan, ie interest is €20, repayments would be €95. So it would be less than littlewoods. I have €1300 in my savings in the Credit Union and about €750 in a work scheme. 

Regarding paying off Littlewoods and AIB, your right it won't work out now, at the time I thought i'd get by on less for the month. 

I actually hate running up debts, to be fair i've got my debt down from 21k so I think that comment is a bit unfair but I see where your coming from. I don't think credit is a good thing.

It's just over 2 weeks until I get paid and that's the problem I cleared the AIB loan last time I got paid but left myself broke so have been dipping into it. The €80 is money I lent someone out of the AIB loan which I got today.


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## Bronte (6 Nov 2012)

You borrowed 550 from the Credit Union even though you have savings of 1300 there and not only that you've 750 savings in a work scheme.  

Please explain to me why you take out 3 types of credit when you've savings?

Why don't you cancel the CU cheque.  Take out enough 'savings' to pay off Littlewoods and the AIB loan.  Then write down a budget for the next 2/3 weeks until payday and take this amount out weekly.  

Before next payday, do out a monthly budget, including savings (the 2 types - annual and long term) and start from scratch.


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## Danielle24 (6 Nov 2012)

I can't touch the 750e in the work scheme. 

I didn't want to break in on my savings, but I guess it's the easiest way to clear this quickly.

At this stage I hadn't planned on using the credit union cheque. 

I have a monthly budget spreadsheet I did up a few months ago, if I could just stick to it i'd be fine.

Here's what I have forecast for November:

Wages	November	2046		


Rent		380		
Tax		100		
Insurance	42		
VHI		10		
Lotto		20		
Food		160		
Petrol		120		
Phone	20		
Gym		42.5		
Loan		539
Christmas	400	
College	150
Littlewoods 30		

Totals	2033.5	Disposable	32.5


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## Bronte (7 Nov 2012)

Danielle24 said:


> I have a monthly budget spreadsheet I did up a few months ago, if I could just stick to it i'd be fine.


 
Ok so you've got two problems, you cannot stick to a budget and you are spending 25% of your salary on a loan.

What is the loan amount, interest rate and term. Please tell me you didn't borrow that for a holiday, I have some memory of you and a holiday to Oz. 

How about changing the budget. If you pay off Littlewoods you get an extra 30 Euro, ditto the Lotto of 20 Euro, ditto the gym (for now - unless there is a health reason/benefit). I presume you are getting the cheapest petrol and that high figure of 120 is a necessary commuting cost?

*Food*

Are you really really managing to live on 37 Euro a week or 5.27 a day?

*Xmas*

Don't you have enough in the Credit union for Xmas?

*Car tax and insurance*

Do monthly costs for these not work out more expensive? If you saved the annual amount it costs you a lot less - going back to my point on a savings fund for annual expenses.

*80 Euro loan to friend*

You shouldn't have loaned your friend the 80 Euro, stick to the 'neither a borrower nor lender be'. And honest to goodness you actually borrowed the money to loan - that's just plain madness. Sorry has to be said.

*Pay off debts*

If your serious about this, this time, today you pay off Littlewoods 319 and the AIB account of 339 = 658. And you close both accounts never to be reopened. Credit union of 1300 minus 658 = 642. You'll have to withdraw from the Credit union to live on for 2 weeks. After this you start saving again. 

Fair play to you for going back to education and holding down a job, no mean feat. But all this money juggling must be stressful. There is nothing in your budget for fun, a young person must go out on occasion. Or even have a coffee with your friends and college buddies? You're going to have to tacke the budgeting problem. What makes you go off budget do you think?  Have you tried to keep a spending diary?


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## Danielle24 (7 Nov 2012)

Bronte said:


> Ok so you've got two problems, you cannot stick to a budget and you are spending 25% of your salary on a loan.
> 
> What is the loan amount, interest rate and term. Please tell me you didn't borrow that for a holiday, I have some memory of you and a holiday to Oz.
> 
> ...



I'm gonna work backwards. That last bit about having fun and being a young person, well that's my problem i'd say i'm not going to lie. Some times I just say feck it i'm going out, even though I know deep down I can't afford it. Then the guilt sets in. 

I am going to pay off the littlewoods and try clear the loan from my wages, take a bit from the credit union to pay off the rest etc. 

The €80, I know it was madness, it was a once off to a family member for something. 

The gym is really health related, so i'd like to keep this. I've been shopping around for cheaper car insurance as I just got my full license. 

I do have enough in the credit union for Christmas, I guess that would be the easiest way to do it.

I know it looks bleak paying 25% off the loan etc, but it has only gone that bad the last couple of months digging in to it more and more and having to pay it back. I know I have to put a stop to it. 

Thanks Bronte as always for the great advice.


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## Danielle24 (7 Nov 2012)

I'm not sure where "Get this creditor off my back" applies. I'm not in trouble with any creditors, none of them are on my back?


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## Bronte (8 Nov 2012)

Danielle24 said:


> I'm gonna work backwards. That last bit about having fun and being a young person, well that's my problem i'd say i'm not going to lie. Some times I just say feck it i'm going out, even though I know deep down I can't afford it. Then the guilt sets in.
> 
> .


 
But there's no reason for guilt and no reason why you cannot go out.  If you budget.

If you want further help come back when you've paid off some of the debt and when you've drawn up a proper budget, with a bit of fun time built in.


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## burmo (8 Nov 2012)

Lots of good advice here. Do get rid of those loans and be strict with your budgeting... Do you need to spend 400 euro this month for Christmas?


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## dam099 (8 Nov 2012)

It seems you want to reduce the AIB one due to the ability to draw down more on it which presumably creates a temptation issue to use it. I agree with the other posters on the need to pay off the high interest Littlewoods balance so can you convert the AIB one to a term loan with a definite repayment schedule and no ability to draw down? If not perhaps remove it from your online banking profile to at least make it harder to make impulse drawdowns on it.


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## Danielle24 (8 Nov 2012)

burmo said:


> Lots of good advice here. Do get rid of those loans and be strict with your budgeting... Do you need to spend 400 euro this month for Christmas?



Yes I have to buy presents


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## Danielle24 (8 Nov 2012)

dam099 said:


> It seems you want to reduce the AIB one due to the ability to draw down more on it which presumably creates a temptation issue to use it. I agree with the other posters on the need to pay off the high interest Littlewoods balance so can you convert the AIB one to a term loan with a definite repayment schedule and no ability to draw down? If not perhaps remove it from your online banking profile to at least make it harder to make impulse drawdowns on it.



I don't know if it is possible to do this


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## WindUp (8 Nov 2012)

Danielle24 said:


> I don't know if it is possible to do this


 

Yes it is - just talk to your Bank


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## elcato (8 Nov 2012)

Two minor points briefly.
1) The fact that you haven't cashed the CU cheque does not mean that the loan is not taken out. Either use it or bring it back and say you don't want the loan as they may be adding interest on this at the moment.
2) 42 p.m for a gym is quite expensive. Could you rein this in to 30 ? If you're in Ranelagh see here


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## Danielle24 (8 Nov 2012)

elcato said:


> Two minor points briefly.
> 1) The fact that you haven't cashed the CU cheque does not mean that the loan is not taken out. Either use it or bring it back and say you don't want the loan as they may be adding interest on this at the moment.
> 2) 42 p.m for a gym is quite expensive. Could you rein this in to 30 ? If you're in Ranelagh see here




The total cost of the loan is 20e. My credit union isn't near me so I haven't had a chance to bring the cheque back in. Changing the gym isn't really an option at the moment, i'm trying to squeeze it in between work, college, meeting for projects, study, having a life, the gym i'm in is 5 minutes from me. Ranelagh is completely out of the way.


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## 44brendan (8 Nov 2012)

Bottom line message Danielle, is that you need to curail your borrowing and also control your spending. I acknowledge that at times it can be difficult to postpone a spend when you have a credit card or other means of getting the money. However, all you are doing is extending a problem rather than resolving it. Self responsibility and control is what my granny though me to excercise. I haven't always followed her example, but I do know the consequences of spending today is having to pay tomorrow.


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## Bronte (9 Nov 2012)

Excuses excuses excuses, is Littlewoods paid off ? Is a proper budget completed. I feel like a mother hen here Danielle.  Is this the future for me with my own kids I wonder.  

You make the credit union loan sound like it's nothing with the 20 Euro. You also have to pay back the capital. 

Hope you're not tempted to pay nothing back and use the credit union for Xmas etc thus perpetuating the cycle.


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## Danielle24 (9 Nov 2012)

Bronte said:


> Excuses excuses excuses, is Littlewoods paid off ? Is a proper budget completed. I feel like a mother hen here Danielle.  Is this the future for me with my own kids I wonder.
> 
> You make the credit union loan sound like it's nothing with the 20 Euro. You also have to pay back the capital.
> 
> Hope you're not tempted to pay nothing back and use the credit union for Xmas etc thus perpetuating the cycle.



Bronte, i'm not making excuses. I have paid of Littlewoods. I'm working all week and have been in college 3 nights, so haven't had a chance to do anything, i'll be doing my budget going to the credit union at the weekend when I have time. I have already said i'm not using the credit union loan, so not sure what you mean about capital???

I find that last comment extremely insulting, the future of your own kids? What does that mean exactly. Mother hen? Because you've given a bit of finanical advice on a website?


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## Bronte (9 Nov 2012)

It wasn't at all meant to be insulting, I know you're quite young and I know you were on AAM before trying to sort out your debts, and you've come a long way and I was just wondering if in my future I'll 'still' be at my kids to do this and do that, after spending the morning persuading them that porridge (back to porridge from Weetabix in November) is the best thing ever, that one cannot have toast as they came down too late and proving that they lied about brushing their teeth (no water in sink or toothpaste residue),  it was in the context of having to go back over the same ground with younger people.  That's all.  Maybe I'm just a bit tired and probably need a rest from AAM.  

Good on you for paying off Littlewoods.


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## oldnick (9 Nov 2012)

Bronte - don't you dare take a break from AAM !!


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## Danielle24 (9 Nov 2012)

oldnick said:


> Bronte - don't you dare take a break from AAM !!



+1 to that. You give great advice Bronte. I just found that comment to be very personal in nature.


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## Scoop (13 Nov 2012)

Well if its tea and sympathy you are after then you are on the wrong website.


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