I need someone who is good with sums.

Legacy_user

Hi everyone.

As I posted a few days ago, I reduced my debt from £2400 to £1500 and then to £1200 yesterday. Now that MAY have been a bit of an error on my part because with Barclays, with additions, as I have, the interest rate is 0.2% upto £1500 and 2% for anything over.

Now the question is. I have been doing some debt collecting and now have approx £700 to throw at a debt.

Now working on the principle of paying the highest APR debt first, I would have thought that would have been my NR loan at 9.9% but, if you figure that additions costs me £10 a month (it was sold to me in my student days as a way to reduce the cost of the borrowing), which debt works out the more expensive ?

As an aside, I had a bit of a mini lightbulb moment in that, if I pay off my loan at 9.9%, the first year I will have only paid £600 off the loan, the other £600 in interest. Shocking that the effect compound interest can have!

KatrinaC_2

13000 wrote:

Hi everyone.

Now working on the principle of paying the highest APR debt first, I would have thought that would have been my NR loan at 9.9% but, if you figure that additions costs me £10 a month (it was sold to me in my student days as a way to reduce the cost of the borrowing), which debt works out the more expensive ?

Without knowing the amounts on each debt it's impossible to work out!

Kat

System

Doh! sorry. Well my NR loan is £6000 @ 9.9%
My OD is 1300 atm (although as we speak im still in credit) thats ACTUALLY 9.9% APR :eek: (for the portion I use) but I pay £10 for my additions account.

KatrinaC_2

13000 wrote:

Doh! sorry. Well my NR loan is £6000 @ 9.9%
My OD is 1300 atm (although as we speak im still in credit) thats ACTUALLY 9.9% APR :eek: (for the portion I use) but I pay £10 for my additions account.

Working on 9.9% APR for both debts,
£1300 outstanding on your overdraft
£6000 outstanding on your loan:

At a quick estimate, you're paying £10 interest per month on the overdraft, plus £10 fees.

For the loan you're paying almost £50 interest...

I think.

Kat

rog2

13000 wrote:

Hi everyone.

Now the question is. I have been doing some debt collecting and now have approx £700 to throw at a debt.

Are you the one who answered the 'Moorcroft' ad?:rolleyes: :rolleyes:

System

So we know who needs paying first Thanks for that. The real scary part is that above £1500 on the Barclays OD is 2% per month! ie 24% a year

System

rog2 wrote:

13000 wrote:

Hi everyone.

Now the question is. I have been doing some debt collecting and now have approx £700 to throw at a debt.

Are you the one who answered the 'Moorcroft' ad?:rolleyes: :rolleyes:

Nahh, i'd be no good at that because when people would say "cant/wont pay" Id do my usual and jsut reply "ohhh I can't be ar$ed!" and go away.

KatrinaC_2

13000 wrote:

So we know who needs paying first Thanks for that. The real scary part is that above £1500 on the Barclays OD is 2% per month! ie 24% a year

Hehe - on that note I called Barclaycard to see if they could offer me a decent BT deal before I closed my account and the woman at the other end of the phone line was shocked to hear that Halifax were charging me 22% on my standard balance as it was "extortionate" (her words). I then pointed out that Barclaycard were charging me 27% and she went very quiet after that...

Kat

all_hours

Over a year £1300 overdraft at 9.9% will cost up to £130 interest plus £120 in account fees. £250 on a debt of £1300 is around 19%.

But if the account is sometimes in credit then you won't pay the full interest - can you look at the last 3 months statements to work out the average interest you're paying each month?

Then look at changing your account to one of the other current accounts without the £10 fee but paying the higher interest on the overdraft. Pay the £700 off the overdraft.

CLAPTON

to work this out you need to say

a. the average overdraft amount and the maximum (i.e. is it always less than 1,500)

b. you say the barclays charge 0.2% (per month presumably) for OD less than 1500 but later say the rate is 9.9% APR ...but 0.2% per month is only 2.42% APR

can you clarify?

Hello

KatrinaC wrote:

I then pointed out that Barclaycard were charging me 27% and she went very quiet after that...

Kat

Nice one! :rotfl: