Debt Consolidation: Help Me Stop Drowning

[hondaboysa]

They did initially give 20 years, but I thought better of it to extend it, since the extra money per month I had with this arrangement, would be a nice buffer, and that I would pay in any extra money I had left after the month was over, into this account anyway, so it was more flexible.

But now with a single income, and everything going up rapidly, it's getting tight.

@Greg thanks for the advice. So basically I have no options at the moment. Good to know, and bad at the same time.

Any update regarding your appointment that you had with the bank?

 

[sjm]

Indeed. And that's why my logic says that they can extend the home loan to say R682k - still under the home's value - then I can pay off 100% of my personal loan, saving me about R1.5k, gaining them extra interest etc., and saving me from drowning, and nobody gets hurt.

But clearly this is an impossibility.

Their worry would be around the fact that they can see you're already struggling and they know that interest rates are going to go up sooner rather than later. At the moment SB shares the risk with ABSA, if they take on the extra amount & you end up defaulting, they'd then be left holding the entire can.

Sucks, but from a risk point of view I totally get why they'd be unwilling to take over the personal loan amount.

Hope you got a good result from your interview

 

[Ho3n3r]

Any update regarding your appointment that you had with the bank?

Sat there for 40 minutes, she was busy with someone else, and I had to get back to the office. Will try again tomorrow.

 

[Ho3n3r]

Their worry would be around the fact that they can see you're already struggling and they know that interest rates are going to go up sooner rather than later. At the moment SB shares the risk with ABSA, if they take on the extra amount & you end up defaulting, they'd then be left holding the entire can.

Sucks, but from a risk point of view I totally get why they'd be unwilling to take over the personal loan amount.

Hope you got a good result from your interview

But then the total amount would be about 18-20% less, increasing the chance that I don't default on either, instead of on both, substantially. So at the moment, I'm much higher risk overall. Also, interest rates would go up regardless of what I do anyway.

 

[Stefanmuller]

First up, good for you acknowleding the fact that you have a debt problem and trying to do something about it.

Secondly, a R690k property is not really shooting above your earning potential, as these days you dont really get a flat for much less. Yes, maybe if you shopped around a bit more and got a place for R550k it might have been better, but even with that you might have had to put down a deposit. Simple things like late payment of a few Edgars payments can cause not getting a full bond. What you pay now for that bond is not much more than what the rent would have been anyhow, given that its 15 months later.


You already have the property, so try and keep it if you can. What I would do is see all the banks or better still, a bond originator, to see if there is any equity available in the property. There already is R12k available just from your payments, but if the property has since grown in value, there might be more. For ecame if it can sell now for R740k there is an additional R50k as security to loan against. Different banks have different criteria. Chances are that you bought above market value which is partly why you did not get 100% bond and if it is in a crappy area with low growth there might not be any equity at all.

I think you still have a few avenues to investigate. Rather than just blindly selling. Banks will generally try to accommodate you if it means they might get a little less money rather than nothing at all. Its worth a shot. Just dont blindly sell because it may be that you dont find another similar place for less than that.

So first step is to have the property valued, see if in the case that you sell, you make a surplus after paying off the bond and maybe even your personal loan. If you dont want to sell, but the value is OK, go to the banks with that to try and refinance. Having a property is a good thing, and is toughest right at the beginning in the first few years, but because the bond stays the same or decreases and the value and your salary increases, it gets easier as time passes.

 

[boxerulez]

I seriously need help now.

Basically, I have a home loan of R621k (Standard), and a personal loan of R74k (ABSA), which covered the deposit, and a bit more. The house price was R690k.

Now, before I started paying this, with the interest rate and the levy cost at the time, my salary was pretty much on the limit, I mean I knew I could afford it, and we have to knuckle down for 5 years, but it will get better with time.

However, then the interest went up twice in the last year, electricity went up quite a bit, and our levies went up R400 in the last 3 months, making my expendable income about R1.1k less than it was a year ago.

Thus, I went to Standard Bank and asked them if they could pay off the R61.7k remaining on the ABSA loan, and add it to my homeloan, as it would make business sense to them as well, as they would get more money from me in terms of interest, and I would pay less, and the only loser would be ABSA, which is really fine by me.

But, according to them, they can only up the bond's worth up to the original R621k, and pay out the amount that I've paid over to them in the last 15 months, which is about 12k after interest.

Surely there's another way, without re-paying bond registration etc.? How can I make this easier on both me and the wife? We seriously can't cut anywhere anymore - we don't even have DStv, never have, never will. Next things that will need to be cut, is insurance and medical aid, which is not ideal.

I really hope someone with experience in such a situation can give me something I can look at.

Thanks in advance.

If you have new cars or cars good for a good few years and you can live without your credit cards....

Debt Counselling.

You will keep your assets and your councillor will negotiate lowered interest rates on all loans/debt.

Maybe just have a meeting with one and see if it can work for you.

 

[F40]

Everyone is focusing on increasing or replacing the existing debt. The cause of the problem is too little income. Why does your wife not get any job, even if it is temporary whilst looking for a job se wants - even if it is a cashier at a supermarket or a waitress or whatever. I was there once.Desperate times call for sacrifices.

 

[mak2000]

Everyone is focusing on increasing or replacing the existing debt. The cause of the problem is too little income. Why does your wife not get any job, even if it is temporary whilst looking for a job se wants - even if it is a cashier at a supermarket or a waitress or whatever. I was there once.Desperate times call for sacrifices.

This.

There are a few things in your hand, OP. You seemed to have stretched yourself by getting the most debt you could afford at the time. E.g going for a 30 year bond vs 20 year. Also, now you blaming the circumstances for why you cannot make ends meet. If the situation is desperate then your wife has to find a job and work. Also, there must be other expenses that you can cut. E.g. Get more efficient electric appliances etc. not sure what car you drive.

I see this as you looking to add on to more debt by moving it around rather than getting your spending under control or increasing your income( by getting your wife to work)

Even if you get that additional loan it might end up being aN temporary relief. What if electricity prices it interest goes up again? What then?

Rather make a decent dent in the debt by getting the wife to work and cutting back on expenses. Once you have built a decent contingency you will reduce the risk of future shocks.

My two cents.

 

[Ho3n3r]

This.

There are a few things in your hand, OP. You seemed to have stretched yourself by getting the most debt you could afford at the time. E.g going for a 30 year bond vs 20 year. Also, now you blaming the circumstances for why you cannot make ends meet. If the situation is desperate then your wife has to find a job and work. Also, there must be other expenses that you can cut. E.g. Get more efficient electric appliances etc. not sure what car you drive.

I see this as you looking to add on to more debt by moving it around rather than getting your spending under control or increasing your income( by getting your wife to work)

Even if you get that additional loan it might end up being aN temporary relief. What if electricity prices it interest goes up again? What then?

Rather make a decent dent in the debt by getting the wife to work and cutting back on expenses. Once you have built a decent contingency you will reduce the risk of future shocks.

My two cents.

Firstly, there are no expenses we can cut back on - we only use what we need already.

Secondly, I'm not trying to get an additional loan - in fact, I'm trying to achieve the exact opposite, by setting my personal loan, and then just having a single loan - my home loan.

First up, good for you acknowleding the fact that you have a debt problem and trying to do something about it.

Secondly, a R690k property is not really shooting above your earning potential, as these days you dont really get a flat for much less. Yes, maybe if you shopped around a bit more and got a place for R550k it might have been better, but even with that you might have had to put down a deposit. Simple things like late payment of a few Edgars payments can cause not getting a full bond. What you pay now for that bond is not much more than what the rent would have been anyhow, given that its 15 months later.


You already have the property, so try and keep it if you can. What I would do is see all the banks or better still, a bond originator, to see if there is any equity available in the property. There already is R12k available just from your payments, but if the property has since grown in value, there might be more. For ecame if it can sell now for R740k there is an additional R50k as security to loan against. Different banks have different criteria. Chances are that you bought above market value which is partly why you did not get 100% bond and if it is in a crappy area with low growth there might not be any equity at all.

I think you still have a few avenues to investigate. Rather than just blindly selling. Banks will generally try to accommodate you if it means they might get a little less money rather than nothing at all. Its worth a shot. Just dont blindly sell because it may be that you dont find another similar place for less than that.

So first step is to have the property valued, see if in the case that you sell, you make a surplus after paying off the bond and maybe even your personal loan. If you dont want to sell, but the value is OK, go to the banks with that to try and refinance. Having a property is a good thing, and is toughest right at the beginning in the first few years, but because the bond stays the same or decreases and the value and your salary increases, it gets easier as time passes.

Thanks. We have no credit cards or Edgars accounts. The only debt I have is:
- Home Loan
- Personal Loan, which was the deposit for the house
- MFC Loan, which is the R40k repayment on the Toyota Tazz we bought last year, which is about 1.4k per month.

If you have new cars or cars good for a good few years and you can live without your credit cards....

Debt Counselling.

You will keep your assets and your councillor will negotiate lowered interest rates on all loans/debt.

Maybe just have a meeting with one and see if it can work for you.

As stated above, we only have the 3 necessary loans as credit, no Edgars accounts, no credit cards etc., the only other sort of form of debt is the 2 cell phone contracts, of R300 each, which I cannot just cancel, and are necessities anyway.

I work very diligently with money. My wife hates me for it, but she agrees that it's very helpful not to make poo for ourselves. But when there's nothing to cut, there's nothing to cut.

And if you know of any jobs in Centurion for someone with no qualifications and cannot do math, please let me know. She's been searching since she lost her job - even half day positions, but after she sends her CV, she never hears back.

-----

Anyway, after moaning like a bitch on HelloPeter, they phoned me today regarding my complaint, where I basically whined that they are not willing to accept MORE money from me.

The home loan department told me on the phone that they were supposed to let me do an extended loan application first via the branch, and then only give me options like credit cards, personal loans etc. to improve my chances. So they sent my details to a sales consultant, who contacted me a few minutes later and we went through the application for an extra 62k, as well as 2k for the registration of the extra portion, and it was approved within minutes.

Now they just need to tell me the most important bit: How will it affect my interest rate. I asked him if they take into consideration that now I will actually be lower risk due to the monthly debt potentially being a lot less now, and he said they do indeed. Anyway, if the interest rate can stay the same or go up just a little, I'm fine with that. It's 10.44% now, so if it doesn't go higher than 11% I'll be happy with that.

Holding thumbs. This will help me SO much.

 

[Mike Hoxbig]

Glad it's sorted dude. Killing off that personal loan will make a huge difference. Lesson learned I hope...

 

[^^vampire^^]

Good luck, hope it all goes well!

 

[akescpt]

happy ending. nice. hope it goes better now OP.

 

[Nikita_k]

well done sir, your perseverance paid off at the end.

 

[Ho3n3r]

Thanks guys Your help has been awesome, and in a way kept me going as well. That, and the knowledge that I need to provide as best I can.

Glad it's sorted dude. Killing off that personal loan will make a huge difference. Lesson learned I hope...

Thanks mate. To be honest I would have done the same again if given the same choice. My independence is a very crucial part of my wellbeing, and the alternatives would have either been renting again - where I've always had slack/****ty/bossy landlords without exception, where for example fixing a sinking bath took one of them 16 months before they actually came to look at it - or living with family, which really wasn't an option, as my family tends to keep treating everyone as kids.

Just waiting for them to confirm to me how much the interest would go up/down, if anything. Currently the homeloan is at 10.44%, so let's see how it goes.