# Are we in serious debt  or not?



## heretohelp

Myself and my partner are engaged, due to be married next year. We have 2 children under 6 . He is in full time employment, recently moved from the construction industry to another job. 

I am a full time carer , and do not work outside the home. 

We have the following debts of which we are well able to pay but i am wondering are we considered to be in alot of debt, or is it okay once we can manage repayments. I am just wondering if anyone thinks we should be doing more to repay our debts.

Monthly Outgoings:

Credit union    400 euro
Bank Loan      200 euro
Maintenance  400 euro
Car Loan       483 euro
Credit Card    120 euro
Food            400 euro
Gas               80 euro
Esb               80 euro
Phone           80  euro
Diesel          200 euro
save           1020 euro

Total         3463 euro

Income
 Wage 2800 gross , excluding over time
Carers 800 
Domiciliary Care allowance 300
Child benefit 320

Total 4220

Savings,

3000 bank
7200 Credit Union 
10000 ebs

Thanks everyone


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## davidoco

you ll have to post the loans outstanding balance.


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## heretohelp

We owe 27000 euro on the credit union loan , 5 years left
           7300 on the bank loan 3 years left
 the car loan is newly purchased, 483 euro over 5 years


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## ClubMan

You have €34K in unsecured credit plus an unspecified car loan but I'm guessing that it's c. €20K. Let's say a total of €50K in unsecured debt for argument's sake. You earn c. €50K net p.a. Sounds serious enough to me! Why don't you use your savings to clear/reduce your most expensive loans?


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## davidoco

heretohelp said:


> save 1020 euro


 
Yes, for example use that 1000 for seven months to clear the bank loan.


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## heretohelp

the 7200 is in the credit union as security for the loan, the 3000 is sitting in an account , the 10k is savings to put towards our wedding as we want to pay for it all cash and not borrow again.


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## heretohelp

We use the 1020 to save for our wedding


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## ClubMan

Is this an accurate summary of your debts?


> We owe 27000 euro on the credit union loan , 5 years left
> 7300 on the bank loan 3 years left
> the car loan is newly purchased, 483 euro over 5 years


What is the amount of the car loan?

What are the rates charged on the various loans and are any of them fixed?

Saving while carrying unsecured and probably high cost debt rarely makes sense.


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## eileen alana

Do you have mortgage/rent payments to make?


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## heretohelp

ClubMan said:


> Is this an accurate summary of your debts?
> What is the amount of the car loan?
> 
> What are the rates charged on the various loans and are any of them fixed?
> 
> Saving while carrying unsecured and probably high cost debt rarely makes sense.


 
We own our house. Not sure of the rates but there all fixed on each loan , car loan is 25k over 5 years.


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## ClubMan

heretohelp said:


> Not sure of the rates





> but there all fixed on each loan


So that probably means fixed rate breakage penalties if you decide to reduce or clear the loans early?


> We own our house.


One possibility for reducing your debt costs could be to remortgage for the amount outstanding on the loans (and maybe even to cover some of the wedding costs) but scheduled over c. 5 years rather than a full mortgage term of 20+ years. Of course you would need to carefully crunch the numbers to assess the viability and possible cost savings involved. And make sure not to fall into the trap of racking up debt and then rolling it onto the mortgage. On that point you might also want to review matters to understand the spending patterns which lead to you racking up this debt and maybe putting in place budgets/plans to avoid this in future and to live more within/below your means rather than on credit.


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## sparkeee

yes you are in serious debt.


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## Mpsox

Yes, you have a lot of debt but you seem to be organised enough to cope with it at the minute. In addition, whilst you have around €50-€60k in debt, you do have €20k in savings. The risks here are what happens if your hubby to be lost his job, (given that construction is struggling at the minute) or if the debut continued to rise.

Did you really need to borrow €25k for the car. Accept the desire to have a new car can be strong and with 2 smallies, it can sometimes feel you need a van to carry all their stuff around, but it is still a lot fo debt over 5 years for an asset that at the end of it will be worth far less.

From a practical point of view, once the wedding is out of the way, you should be able to make some serious inroads into the debt. You could also follow Eddie Hobbs infamous advice and invite twice as many people and insist on cash presents only!!!!


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## ClubMan

Mpsox said:


> Yes, you have a lot of debt but you seem to be organised enough to cope with it at the minute. In addition, whilst you have around €50-€60k in debt, you do have €20k in savings.


And a wholly owned asset presumably worth a few hundred grand?


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## heretohelp

We had two vehicles and sold one traded the other and bought one car. 
He now has a company van but doesnt work in the construction industry now. I wouldnt really be into getting another mortgage.


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## Welfarite

The 3k in bank "sitting there" should be used to reduce your dearest debt. It strikes me that your popst here is a bit too late as you have recently borrowed heavily to buy a car adn it alos appears that you borrowed recently from CU.


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## ClubMan

heretohelp said:


> I wouldnt really be into getting another mortgage.


You should at least *consider *it and crunch the numbers as it is one possibility of reducing your debt costs. I don't really understand why some people post here looking for advice and then dismiss out of hand what may be perfectly reasonable options which others suggest! I'm not saying that a (re)mortgage necessarily *is *the solution to all of your problems but seeing that you are a year's net income in debt and looking at spending even more on a wedding it's certainly one option which should be investigated. Along with any others mentioned here...


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## heretohelp

Welfarite said:


> The 3k in bank "sitting there" should be used to reduce your dearest debt. It strikes me that your popst here is a bit too late as you have recently borrowed heavily to buy a car adn it alos appears that you borrowed recently from CU.


 
no i didnt recently borrow the credit union that loan is 3 years old , it was originally a 55k loan which i paid 24k off about 6 months ago.

The car was needed , its specially adapted.


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## heretohelp

ClubMan said:


> You should at least *consider *it and crunch the numbers as it is one possibility of reducing your debt costs. I don't really understand why some people post here looking for advice and then dismiss out of hand what may be perfectly reasonable options which others suggest! I'm not saying that a (re)mortgage necessarily *is *the solution to all of your problems but seeing that you are a year's net income in debt and looking at spending even more on a wedding it's certainly one option which should be investigated. Along with any others mentioned here...


 Im  not dismissing the advice, i take it all on board, but with only recently clearing a mortgage it seems like a big step to take .


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## ClubMan

heretohelp said:


> Im  not dismissing the advice, i take it all on board, but with only recently clearing a mortgage it seems like a big step to take .


Yes - but you should at least investigate the option and crunch the numbers. It could be one way to save money - e.g. if you can convert existing higher cost unsecured debt into lower cost secured mortgage debt over a similar term and the expenses involved (e.g. early fixed rate breakage penalties on the unsecured loans, other charges, legal fees, mortgage protection life assurance etc.) don't negate any potential savings.


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## heretohelp

thanks clubman ill look into it.


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## Flax

I know I'm going to sound insane, considering we now live in a world where everyone wants it all...

You can't actually afford to get married. You are heavily in debt. You should be sorting out your debt before doing something stupid like spending a fortune on an unnecessary want like a wedding.


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## ClubMan

Or do get married but adjust the budget to suit your means?


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## z103

> Or do get married but adjust the budget to suit your means?


Indeed. It's the party that costs the money, not the actual tying of the knot.


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## Welfarite

heretohelp said:


> no i didnt recently borrow the credit union that loan is 3 years old , it was originally a 55k loan which i paid 24k off about 6 months ago.


 
Soory, for assuming that but I was going on the  basis that a CU will only usually give out a loan four times the amount of shares held (7,200)


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## Guest117

Hereto help

Clubman is correct about looking at the whole mortgage thing as generally this is where the lowest interest rates for loans are to be found. I understand that you do not want a mortgage but that does not necessarily make it the right decision. I believe it will reduce the interest payments on your debts and save you money in the long term. At least look at the numbers !!

PS. The very best weddings I have been at have been the smallest ones - no need to spend loads of money to create a special day - just make sure the right people are there and it will happen.


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## heretohelp

I originally had a credit union loan of 55k , with 11500 in savings, i then went in with 20k cash and then the loan was 35k so i withdrew 4000 from savings and put this off loan which reduced it to 31k, and its now 27 as ive increased some monthly payments on it.


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## sam h

Am I missing something - I don't think the OP is in a bad position.  If someone else posted that they had no debts other than €55k left on their mortgage & no probs making the payments...people would probably be saying what a good position they're in.

I would agree that to re-mortgage might be a more cost effective way (due to lower interest rates), but I can also understand why someone may not want to risk using their property to secure the loan.  They are making their payments & they seem to have some left over at the end of the month and they have a roof over their heads - a better position than many!


Loads of threads to do with keeping prices down for weddings - have a look (I think Wicklowlasses one recently covered it quiet well - seems to be similar set-up)


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## eileen alana

Flax said:


> I know I'm going to sound insane, considering we now live in a world where everyone wants it all...
> 
> You can't actually afford to get married. You are heavily in debt. You should be sorting out your debt before doing something stupid like spending a fortune on an unnecessary want like a wedding.


 

I couldn't disagree more with you.  The OP owns her own home, which is more that can be said about a lot of other young couples who are cripppled up to their eyballs with 30 and 40 year mortgages.  Fair enough they are 50 or 60 grand in debt, half of which is on a specially adapted car to cater for the little's one's special needs.  They don't seem to have any problems meeting the monthly repayments and in fact able to save a grand every month. 

i say Good luck to them and I hope they have a lovely wedding.


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## heretohelp

thanks guys,

i felt like i was in a relatively okay position before i posted here but wanted to get some opinions on what other people thought of our situation. 

We do ok, we are able to treat our kids , go on holiday , and as soon as our wedding is over we will put the 1020 a month off our debts so will hopefully bring those down considerably. 

Its just i know so many people around my area really up to their eyes in it , big house big car and jeep but really struggling to pay for those and i dont want to fall into that trap.


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## ClubMan

sam h said:


> Am I missing something - I don't think the OP is in a bad position.  If someone else posted that they had no debts other than €55k left on their mortgage & no probs making the payments...people would probably be saying what a good position they're in.


Owing a year's net household income in unsecured and presumably high cost credit is serious in my opinion. Securing it on the property if it significantly reduces the overall cost of credit having accounted for any costs involved is a much better idea in my opinion. Also - I would be concerned about the spending habits that caused this situation to develop and the fact that the original poster is countenancing spending even more while burdened with this debt.


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## heretohelp

The debt accumulated from specially adapting our house to suit a wheelchair user. So i dont think i had an option but to let this debt accumulate from this.


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## ClubMan

Fair enough. It wasn't clear it if was (the usual?) lifestyle expenditure etc. Have you tried crunching the numbers to evaluate the potential benefits of going the mortgage route?


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## Good_Grief

sam h said:


> Am I missing something - I don't think the OP is in a bad position.  If someone else posted that they had no debts other than €55k left on their mortgage & no probs making the payments...people would probably be saying what a good position they're in.



A voice of reason finally 'appears' in the thread! 

As a long time lurker on AAM I'm permanently amused by the often hysterical 'advice' given by prophets of doom to those who ask for an appraisal of their financial situation.

Quite often these situations _are_ dire, so the doom-mongers might well be justified in suggesting there is no hope, matters are beyond repair, the only option being to sell the children, house and car and with the resulting e1,063.76 clear the money owed on one of the 26 credit cards owned.

But sometimes - as in this case - the financial situation detailed by the person seeking advice is much the same financial situation that the vast majority of the population find themselves dealing with: it's not entirely pretty, but it's called real life. And it's all perfectly manageable if the earnings are there and some responsibility is shown: this OP, evidently, fits both bills. 

Those who reply hysterically, I can only assume, get their kicks out of trying to frighten such OPs, instead of opting to offer sound and solid advice. It's really quite pathetic.

Again, I can only assume these folk don't have children/mortgages/regular day-to-day living expenses to deal with, perhaps they are single and can lavish all disposable income on their good selves, or perhaps they were fortunate enough to have bought property before the prices rocketed heavenwards, or raised their children before children became a luxury most mere mortals can't afford?

This OP's hefty debts are hardly ideal, but hey, that's _real_ life! I don't see too many signs of unnecessary expenditure in there, nor an extravagance that suggests he/she is attempting to live a life well beyond their means. Please bear that in mind before you try to convince the OP that he/she is in dire straits.....they're not, they're quite evidently doing just fine in repaying their loans and coping with day-to-day bills. Remember, it's _real_ life.

Next time why not just offer some useful, coolheaded advice to the OP about how they can deal more efficiently with their debt, rather than trying to frighten them - eg is it really necessary to use  '' in response to someone seeking help?

Yes, yes, of course you'll all claim that you're just being honest, being cruel-to-be-kind, etc, etc, but you're not, you're just taking immense pleasure from gasping in horror at the finances of someone a little less lucky than you - ie someone experiencing _real_ life. 

Allow me to embellish the old quote....if you have nothing constructive to say, say nothing.


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## ClubMan

Good_Grief said:


> As a long time lurker on AAM I'm permanently amused by the often hysterical 'advice' given by prophets of doom to those who ask for an appraisal of their financial situation.


Seems to me that *this *is actually the first hysterical post in this thread. For example:


> the only option being to sell the children, house and car and with the resulting e1,063.76 clear the money owed on one of the 26 credit cards owned.





> Those who reply hysterically, I can only assume, get their kicks out of trying to frighten such OPs, instead of opting to offer sound and solid advice. It's really quite pathetic.


Care to cite examples if such alleged hysteria from this specific thread to date?





> Next time why not just offer some useful, coolheaded advice to the OP about how they can deal more efficiently with their debt, rather than trying to frighten them - eg is it really necessary to use  '' in response to someone seeking help?


Do you disagree that my suggestion of rolling the unsecured debts onto a similar term mortgage might not be one worth investigating for viability in terms of cost savings?


> Allow me to embellish the old quote....if you have nothing constructive to say, say nothing.


So - what is *YOUR *advice in this case. If any? Or are you just here to troll?


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## Flax

eileen alana said:


> I couldn't disagree more with you.
> 
> ...
> 
> i say Good luck to them and I hope they have a lovely wedding.


 
They're obviously worried about debt if they're posting on this forum.

They have the ability to pay off the debt within a few years. Instead they're choosing to do something which is a totally unnecessary expense (have an expensive wedding) and continue being in debt.

If they don't plan on solving their problem, I don't see the point of posting here.


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## heretohelp

Flax said:


> They're obviously worried about debt if they're posting on this forum.
> 
> They have the ability to pay off the debt within a few years. Instead they're choosing to do something which is a totally unnecessary expense (have an expensive wedding) and continue being in debt.
> 
> If they don't plan on solving their problem, I don't see the point of posting here.


 
I didnt ask anyone to solve my problem, your right maybe there was no point in posting here , i do have the ability to pay it off and i definitely will , thats my problem not yours flax, and i will have my wedding but who said its going to be expensive?????


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## ClubMan

heretohelp said:


> and i will have my wedding but who said its going to be expensive?????


Well you yourself suggested that it will cost €10K+. To many people that is expensive for a day out.


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## dazza21ie

Flax said:


> They're obviously worried about debt if they're posting on this forum.
> 
> They have the ability to pay off the debt within a few years. Instead they're choosing to do something which is a totally unnecessary expense (have an expensive wedding) and continue being in debt.
> 
> If they don't plan on solving their problem, I don't see the point of posting here.


 
Thats a bit harsh. How can anyone say that a wedding is an unnecessary expense. Fair enough if the OP was planning the wedding of the year trying to out do the celebs but i think the OP is entitled to get married and is being sensible and saving in advance for it unlike quite alot of people who expect the wedding to pay for itself and then wonder why they are in debt afterwards. The OP is simply looking for advice as to the best way to manage her debt. It has already been pointed out to her that a mortgage may be the most cost efficient way of doing so and i agree. However i think the OP is getting a bit of a hard time on this thread. To many eddie hobbs wannabe's out there.


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## dazza21ie

Actually some of you sound more like George Lee than Eddie Hobbs!


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## ClubMan

dazza21ie said:


> i think the OP is entitled to get married


Of course. And they are entitled to blow as much money as they like on it. Even if this means living way beyond their means if they so choose. But if they post here looking for advice on stuff like debt and living within their means then it's reasonable to people to comment as they see fit.





> It has already been pointed out to her that a mortgage may be the most cost efficient way of doing so and i agree.


And they dismissed the idea initially and only later, seemingly reluctantly, admitted that it was something worth investigating. 


> However i think the OP is getting a bit of a hard time on this thread. To many eddie hobbs wannabe's out there.


I disagree. Some straight talking maybe. Nothing more.


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## dmac

Back to the original question are they in serious debt, i would say they are not, but as clubman pointed out they could make life a bit easier for themselves if they paid the debt by remortgaging over a similar period.
This might allow them save more each month for the wedding.


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## dazza21ie

ClubMan said:


> I disagree. Some straight talking maybe. Nothing more.


 
OP has been advised not to get married purely from a financial view point. Surely people can look beyond numbers and understand that marriage is much more important than that.


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## NiallA

heretohelp,

by putting €1020 into savings each month while still having outstanding debts, you are bascially borrowing money to put it into a savings account (probably earning less interest than you are being charged for the loans)

a good idea is to pay down the loans as quick as you can (assuming they are not fixed term loans) if you are disciplined it is ok to borrow if you need to again to pay for the wedding.

you could try the debt snowball method to get rid of some of your debts http://en.wikipedia.org/wiki/Debt-snowball_method


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## ClubMan

dazza21ie said:


> OP has been advised not to get married purely from a financial view point. Surely people can look beyond numbers and understand that marriage is much more important than that.


That was just one specific opinion/piece of advice. There have been lots of others too.


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## Alfie

Couldn't agree more with the suggestion to remortgage, if only to avail of cheaper interest rates than standard credit loans - tracker mortgage and pay off over a five year term rather than 20 and you would probably save money. To have a mortgage of 55K would be a dream for me - I am a long way away from that position and I have three younguns!

I would not personally think your position is as daunting as many on this thread, but to come back to a possible tongue in cheek comment made earlier, try to steer people to give you cash as a wedding present - if you own your own home, you probably have everything you need already for it, so offsetting some cost of the wedding this way would be a big plus. Personally I know the day is not about this, and some people don't even want gifts, but if you could direct the gifts this way, it would be great?

(First and foremost, enjoy it though)


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## mcaul

basically you have approx. 60,000 in loans Incl car, credit union & bank.

You own a house but no mortgae (nice position to be in)

You have 10k saving for wedding + approx. 10k savings in bank & credit union.

You best option is to get a secured loan (not a mortgage) for 50k paid over 5 years. You should get a rate of approx. 6% as there is very little risk for the lender.

This will cost approx. €1150 per month over 5 years. 

This added to your everday savings (keep wedding money seperately) will clear all loans into one easily managed loan.


As to general financial wellbeing, its quite good as you have a large asset in the house. The car loan is also asset backed.

Take away the car loan, (asset backed) add in your savings and you have a net debt of approx. 15k which is less than 40% of one years net salary.  - Not bad!


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## tink

Hi to heretohelp, I agree with the remortgage option because while you are not in 'serious debt' from an overall view you are in a high  interest rate debt which is not a good place to be. Why not compare how much your loans are costing with the current interest rates and compare that to how much you would pay on the remortgage option? It would make financial sense. I understand how you feel about remortgaging it feels like a weight around your neck but it IS the cheaper option. 

Have a fabulous wedding !!! !


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## heretohelp

thanks tink, i will definitely consider it


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## Good_Grief

ClubMan said:


> Seems to me that *this *is actually the first hysterical post in this thread. For example....



Ah, you don't do irony Clubman...and you certainly don't get it.



ClubMan said:


> Care to cite examples if such alleged hysteria from this specific thread to date?



Your use of '' is a good start, don't you think?



ClubMan said:


> Do you disagree that my suggestion of rolling the unsecured debts onto a similar term mortgage might not be one worth investigating for viability in terms of cost savings?



It's certainly worth investigating Clubman, well done. It's just a pity you attached that '', don't you think?



ClubMan said:


> Or are you just here to troll?



Now you know why I chose 'Good Grief'. If someone challenges your attempts to frighten those (remember: '') who seek advice they are a 'troll'? That's rather defensive of you Clubman, don't you think?


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## aircobra19

If your scared of strong/blunt opinions the web isn't the place to be looking for advice. The OP seems to be well able to pick and choose the advise they want to use. I didn't think there was anything extreme in what was posted above myself. The OP came looking for a 2nd opinion and got them. If you have a problem with other posters the report button/PM is a better way of doing it that derailing a thread. IMO.


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## heretohelp

how did i pick and choose the advice ?


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## aircobra19

I didn't say you had done it. Just that you seemed well able to do it.


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## heretohelp

aircobra19 said:


> I didn't say you had done it. Just that you seemed well able to do it.


 sorry, im taking all the advice on board, just havent had a chance to do anything about it yet.


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## MandaC

I agree with Good Grief that the post was a bit OTT.  

In my opinion the OP should remortgage and agree with tink, if only avail of the better interest rates, but keep the term short.  OP will be in a position to apply for a the best mortgage rate on the market, given the level of security in the home.

In my opinion the OP is certainly in more of a  position than a  position


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## aircobra19

MandaC said:


> ....
> 
> In my opinion the OP is certainly in more of a  position than a  position


 
Are you taking that out of context. Did clubman actually post that it was a   position? I thought it was just in relation to not being aware of the rates of the loans they were on and the details of those loans.


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## MandaC

Yes you are right on that one.  Reading back over his post, it was in respect of the rates.


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## aircobra19

Personally I thought both sides of the discussion were interesting and informative.


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## mell61

Hi there, I'm enjoying the discussion here, and wanted to add my tuppence worth!
My view of unsecured debt is basically, if the worst thing possible happened, how well could you cope....
For me, your situation, would have me ask:
What if my partner gets ill, and new job doens't provide sick pay, how long could we survive, and if I had to go back to work could we afford it on the salary I would make?
If we broke up, how would we be able to fund 2 spearate residences... mortgage free now will probably not be mortgage free if you needed to set up 2 new homes.  Would we both be eligible for mortgages (based on news stories of people being declined today who were ok-ed in the past).

For me personally, the level of unsecured debt you have would not leave me comfortable (i'm not a risk taker by any means).

Wedding wise, have the best day you can, but remember that money won't buy you the best day, your friends and family bring it!    And limit the attendees to just the ones who matter, forget about dusting off Aunty Mary that only turns up at weddings, or people you work with that aren't your friends outside of the office.... its your friends and immediate close family that should get first dibs!


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## heretohelp

thanks mell61, 
hopefully we wont break up!!! 
we have a separate residence , his parents which is in his sole name , so thats his at the end of the day but god forbid we did split he wouls live there . 
i wouldnt be able to work as im a carer , so that is something for me to think about . we do have some savings to fall back on and if he did lose the job i would simply put off the wedding and use the money saved to cover bills. 
Want to save for wedding not borrow, and we can safely do this and service the loans (i think)


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## ClubMan

aircobra19 said:


> Are you taking that out of context. Did clubman actually post that it was a   position? I thought it was just in relation to not being aware of the rates of the loans they were on and the details of those loans.


Exactly.


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