£20k debt

pbfhpunk

Hi

This is a strnage one for people with debt but not crippled by it. We're in the lucky position of not struggling to pay things off more aof a it would be nice to shift it asap by making overpayments, I can overpay them all but don't know what the interest rate on anything is!

We have approx £20k debt that's a loan, Credit cards and interest free sofa payments.

Just worked out we get paid £2,709 per month and all necessary outgoings are £1,568 so we should have £1,141 left each month for frivolities and debt repayment.

How long do you think it would take to pay it all off?

And would you hammer it all off asap or make sure you still had a decent lifestyle each month?

Helen

[Deleted User]

hhhggg reported as SPAM

Try using one of the snoball calculators - I believe there's one at the end of the SOA - http://www.makesenseofcards.com/soacalc.html

To use any of these kinds of calculators or to make any calculations you need to find out the APR's though

To pay debt off quickest with overpayments:

1) Pay the minimum towards all debts

2) Pay all available overpayments towards the debt that's costing you the most (highest APR)

3) Once this debt is gone, continue to pay minimum payments towards all remaining debts and now pay the previous minimum payment you were paying to the first debt, combined with any surplus as overpayment to the debt costing you the most, and carry on in this manner (snowballing) until all debts are cleared (this way you minimise the amount of interest you pay back and maximise the reduction in the outstanding balances

D9

Tixy

pbfhpunk wrote: »

Hi

This is a strnage one for people with debt but not crippled by it. We're in the lucky position of not struggling to pay things off more aof a it would be nice to shift it asap by making overpayments, I can overpay them all but don't know what the interest rate on anything is!

We have approx £20k debt that's a loan, Credit cards and interest free sofa payments.

Just worked out we get paid £2,709 per month and all necessary outgoings are £1,568 so we should have £1,141 left each month for frivolities and debt repayment.

How long do you think it would take to pay it all off?

And would you hammer it all off asap or make sure you still had a decent lifestyle each month?

Helen

Hi Helen

No way of knowing how long it will take you to pay things off without knowing the interest rates. You need to find out the interest rates on all your debts to start. Check your statements (monthly or annual) or your original agreements for everything). Make sure all are annual percentages - if monthly figures are quoted convert them to annual figures first.

Then you might want to look at the snowball calculator to see how long it will take to pay everything off if you use all the £1141, and how long if you only paid off say £1000 or £900. The calculator will also show you which to pay off first and the total interest you would pay overall for each repayment amount you compare.

koloko

deleted deleted deleted

GeorgieFTB

Do you actually have the 1k at the end of each month? I would start a spending diary for yourself to check that your budget is fair.

As your not struggling you have options, but if things change then you could have big issues! Can you change your CCs to 0% deals? Does the loan allow overpayments?

If you want to get rid of the debt then you need a target... I suggest a time target, for example, this time next year we will have 10K debt, then you set another target for the year after.

Personally I would link the CCs to another debt, in my head, so 'before I'd paid off the sofas the CCs must be paid'

Whatever will keep you motivated!

Gx

pbfhpunk

Thanks for the answers so far.

I'll try and have a look out for monthly statements, the main bulks 14k is a loan, the 2nd about 4k is credit card and then there's two smaller cards with only like 200-400 limit on, previously I was wa putting about £50 a month on these but then spending more on them, so have decided to pay minimum on these and over pay on loan and larger CC first.

I've worked my budget out on all the direct debits and S's coming out of the bank accoutn so it doesn't include groceries and fuel.

To help us get a bit more sorted we've recently moved closer to work so savind £75 a month on rent, £200 on travel and £50 on the gym! So we're making progress the right way!

I don't lile the idea of doing an SOA and getting ripped apart by people for spending £60 on mobiles and £50 on sky!! Liek I said it's not about reducing outgoings more wondering what other people would do with regards to paying off.

Would you overpay everything you could afford or say overpay £100 on each for a few months see how it goes and up or lower depending on how life goes!

if that makes sense!!

jonjamie1970

You dont have to list an SOA just put the debts, balance outstanding, monthly min poyment and APR.

I did the snowball calculator recently, last week and wrongly thought my overdraft was the cheapest option, turns out my Barclaycard is the lowest APR of my debts so that gets paid off last.

Tixy

I would definitely clear your 2 small cards the first month and then stop all spending on them. If you have £1141 left but are still spending more on the cards then you must really have a bit less than the £1141 each month. (Although obviously it is less if you haven't included groceries).

You don't need to do a SoA on here but I would suggest you work out a budget/SoA for yourself which does include groceries and estimates for annual costs etc so you have a realistic idea how much you really have to put towards debts with no further spending on credit.

Its always a personal choice how much you decide to cut back to be able to repay. Which is why if you are armed with the difference it will make in the interest you will pay that might help you decide.
I personally would budget for the lifestyle I feel is sustainable (so allowing a small amount for entertainment etc) and then see if I am happy with the debt free date the snowball calculator gives me. If not then I would go back and see if I can cut anything else out of my outgoings.

When finding out the interest rates you might also need to check if the loan allows overpayments anyway.

pbfhpunk

Thanks again.

The two smaller cards are used for small things like hotels or web services as we have 3 or 4web sites. Plus they're my husband's cards so around xmas when he's buyign presents for me they go on that card.

So I think at the moment I would prefer to pay off the bigger card as that was used for holiday sand I'm in the middle of doing a course that cost £2k and was paid for on the card, so I know that we won't be putting any more on that and am planning that each time it goes below another £k I'll reduce the limit on it until it's about £2k as that will cover flights to the US - where we have free stays as my brother lives there - and then meals and things and car rental if needed while there.

climbgirl

pbfhpunk wrote: »

I don't lile the idea of doing an SOA and getting ripped apart by people for spending £60 on mobiles and £50 on sky!! Liek I said it's not about reducing outgoings more wondering what other people would do with regards to paying off.

Would you overpay everything you could afford or say overpay £100 on each for a few months see how it goes and up or lower depending on how life goes!

It's kind of hard to answer your questions as only you can say how comfortable you are with the amount you spend on non-essentials and how much you pay on debt. It's a personal choice and one only you can make.

You say you worry about people ripping you apart for having Sky and expensive mobiles - personally, my choice would be to ditch those and put the money on debt. But that's because I think Sky is mostly rubbish anyway and I don't use my mobile very much!

You're clearly comfortable spending money on things like that and not paying down the debt quicker, and that's fine. But if you want recommendations on ways to cut down on spending and pay down the debt faster, it's hard to do that without seeing an SOA.

You need to come up with a budget that works for you and is sustainable long term (ie is comfortably within your means and allows you to pay down the debt and ultimately save once the debt has gone). As to the levels of non-essentials included in the budget, only you can set the limit that works best for you.

[Deleted User]

If it were me and my debt, how quickly I paid it off would very much depend on the APR's - If I was being charged 29% interest on a credit card I would be in a far bigger hurry than if I was being charged 7% on a loan. And, are you able to balance transfer any of it to 0% cards?

If you list each of your debts and the APR's then you will know which to prioritise. Doing an SOA can be useful for you - your decision if you want to post it here or not. But it can help you see if you're missing something from your budget that should be there, or if you are paying a hugh amount for something unnecessarily

For example: £70 on mobile phones is not high for some, and is for others. I used to pay a lot more for my mobile contract than I do now, not because I needed to cut down, but because I wasn't using the calls and texts I was being given every month - I'd rather the spare cash in my account than the mobile phone company's account. It really depends on what your priorities are and what you can afford. And again £50 for SKY TV isn't a lot if a) you can afford it, and b) you actually watch it - I'm not tempted by satellie TV because for me I wouldn't use it and it would be a waste of money.

HTH

D9