A snowballing question

Mule

Hi I'm new to the chat forum although have been coming on this brilliant site for a few months now. I have learned a lot from you all and Martin (have the book too!). My query is how can you snowball if you are only able to make the minimum payments each month on CCs? Am I right in understanding that snowballing is about prioritising the debts to pay of the highest interest first and then the minimum payments on all other debts?

Thank you in anticipation!

OberonSH

Yes, I think you can. Just don't tick the box that says you can make overpayments. It'll then work it out using just that debts minimum payment.

Not necessarily. It's got me paying off some 0% debts first, probably because they're much much smaller than my large debt with interest.

Edited to say - I'm talking about the snowball calculator to get your DFD. Otherwise then no, you can't because you're not throwing any extra at them.

brranger

Mule wrote:

Hi I'm new to the chat forum although have been coming on this brilliant site for a few months now. I have learned a lot from you all and Martin (have the book too!). My query is how can you snowball if you are only able to make the minimum payments each month on CCs? Am I right in understanding that snowballing is about prioritising the debts to pay of the highest interest first and then the minimum payments on all other debts?

Thank you in anticipation!

If you can only make the min you can't, but even a fiver extra on the highest rate cc would help.

Post balances and rate also min payments if you like,
Might also post an soa to see if we can find you that fiver

Annie_Fanny

Look at this thread for advice on posting an 'Statement of Affairs' (SOA):

http://forums.moneysavingexpert.com/showthread.html?t=107280

Cheers

Annie

southernscouser

Your correct in what you say about snowballing in reference to the calculator. But it also works with "tarting" which means getting your credit card debts transferred to the cheapest possible APR!

Mule

Here are the details for the snowball calculator:

CC1 balance £5300 APR 14.6%
CC2 balance £3100 APR 5.4% LOB
CCs balance £1850 APR 5.9% LOB

Loan balance £18500 APR 17.7%

brranger

Mule wrote:

Here are the details for the snowball calculator:

CC1 balance £5300 APR 14.6%
CC2 balance £3100 APR 5.4% LOB
CCs balance £1850 APR 5.9% LOB

Loan balance £18500 APR 17.7%

Can't do alot about the loan as suspect it will be fixed only helps if you pay off in one lump.

suggest you pay min on cc2 and cc3 and any extra we find you off CC1,
Are either CC2 or 3 still within the offer period able to take any balance off CC1?

Mule

Good point - I'm actually not sure if they are still in the offer period but presumably I could keep moving off of CC1 to keep CC2 and CC3 "full" for the time being (whilst still making the min payments off 2 and 3).

brranger

not to full leave a bit of breathing room on them plus remember you min payments will rise but you will save on interest and payment on CC1 will fall about same amount.

OberonSH

I was told by my banker that although the bank don't allow overpayments on my loan, what I should do is put the extra away in a savings account and then basically take out a smaller loan, using the savings to pay the difference - technically overpaying in lump sums. Don't know if this would work in practice, but it was the personal banking guy that told me this.

brranger

its what I'm doing but my loan rates are 5.5% and 5.8% and I have a regular saver at 10% / 8% after tax and another at 8% / 5.6% after tax,
Only £1000 of my debt is on cc @ 5.5% LOb and as you can see this is cancelled out by savings,
plan to save £12000 to pay of loan by which time the CC will be clear and It will Prob be less than £12G anyway as its alway reducing.
Rambling sorry