A WOMAN who cleared a whopping £60,000 debt in five years swears by three tips that helped to fix her finances.
Dr Nikki Ramskill took out her first credit card at 18 years old before launching herself into medical school – and plunging her bank balance into the red.
Nikki opted to take out a debt consolidation loan to streamline her debts into one monthly payment
Through loans, overdrafts, a hefty tax cost and the credit card bill, she quickly found herself in deep debt.
But it was only when she decided to take five months off to travel around Australia, New Zealand and Thailand that she realised how dire the situation had become, the Mirror reports.
Nikki, who is now aged 37 and lives in Milton Keynes, began to panic while trying to pay her bills and her travelling after realising there was no money coming in.
Soon the doom and gloom of being a few bad decisions away from real trouble that prompted her to change her habits.
She said: “This was the point where I thought, ‘Oh my God, this is terrible’. I was on a chance of a lifetime trip that I would never get to do again.”
When she got back to the UK at 31, she pledged to do the work to sort herself out – but found getting out of debt was harder than she’d realised.
Zero percent balance transfer credit cards were no longer an option as her credit rating had started to plummet.
She took on the snowball method – by paying off the smallest of outstanding and due amounts first.
Nikki found that as she cleared one debt, it motivated her to move onto the next highest sum.
But after taking a pay cut, she still struggled to make it all work.
After accessing all her options, Nikki opted to take out a debt consolidation loan to streamline her debts into one monthly payment.
She said: “I cut up all my credit cards and didn’t use them because I didn’t trust myself. I had to go cold turkey.
“The good thing was it halved my payments. The other good thing was the interest rates I was paying were much lower.”
Within five years, Nikki – who now runs The Female Money Doctor – has been able to pay off the £60,000 while earning about £2,600 a month.
She credits the snowball method for helping her repay £10,000.
She was able to repay around £40,000 through the consolidation loan, and she inherited £10,000 after losing her dad.
Although a debt consolidation loan was the right move for Nikki, she admits she “got lucky” by being able to agree on good rates with the bank manager.
She said: “Some debt consolidation loans will be secured against your home, so if you miss payments, your home could be at risk. Debt advisers would never suggest taking out a secured loan to repay unsecured debts.
“You should also check any fees for switching out of an existing loan deal – and whether there are any early repayment charges. It may not be an option at all if you have a poor credit history.”
To anyone who may be struggling with money problems, Nikki has three pieces of key advice.
She says to tell someone as soon as possible, speak to a debt advisor for free and make a decision about how to get help and come up with a plan quickly.
Within five years, Nikki, has been able to pay off the £60,000 while earning about £2,600 a monthCredit: Nikki Ramskill / Livi