How to pay off debt..loan or credit card

chris_0_2011

Hi everyone,

I currently have £8000 worth of debt that I'm trying to pay off as quickly as possible. I have £5400 outstanding as part of loan from Lloyds Tsb. £1200 has just been transferred from a virgin card to a Barclays Platinium card( interest free balance transfer) and finally the rest is on a Lloyds TSB plantinum card.

The total amount taken as part of the loan from Lloyds TSB was £10000 and Im about halfway through paying that back(2 and a half years left). I dont at this point have the interest rate of the agreement but I know I pay £205 a month and about £40 per month is swallowed up as interest.

With regards to the credit cards I usually pay the minimum payment each month which is about £40. As for interest the Barlcay card is fine due to the interest free period. However, the lloyds TSB card is around £20 per month interest. What I'm trying to do is work out the best way of paying this money back. I've looked at various loans but I was rejected by Sainburys, Natwest and Satander at a rate of around %7. Natwest did offer me a loan but it was at a rate of %14.

I have looked at my credit report and can confirm that I have never defaulted on any payments. I have noticed there are still records of previous agreements that have been settled. In particular credit cards with Lloyds TSB which I had before I upgraded to the Platinum card. I have read the forums and noticed that some people feel that having a large amount of credit can affect any future applications..is this true?

The £1200 on the Barclaycard for now is fine for the next 19 months. I was wondering if anyone would be able to give any advice on how best to pay back the existing balance? Also is it worth me canceling anything on my credit report which has been settled?

All this has coincided with me changing jobs and taking a slight decrease in wages. This does not change the amount I want to pay back each month as this is my priority! Any help with this would be great,

Thanks in advance

Chris

Tixy

Hi chris and welcome.

What APR os the £1400 on the lloyds card at? how does it compare to the 14% loan you were offered?
Are you able to afford to increase the amount you pay a little over the minimum?

If you've applied for a few things and been declined or not been offered a rate you are happy with then I would accept that you are not going to be able to move the debt at the moment and instead just focus on paying as much as you can off this debt each month.

You might want to look at the snowball to see how much quicker you can pay the debt off and reduce the total interest you pay by upping your repayments a bit - http://www.whatsthecost.co.uk/snowball.aspx

If you are struggling to pay any extra then you might want to consider completing and posting a statement of affairs on here to see if people can spot places you could save money/get things cheaper etc - http://www.makesenseofcards.com/soacalc.html

Regarding your credit file - even after an agreement is settled it will show on your credit file for the next 6years. You need to check that it doesn't show the account as still open or as available credit.

chris_0_2011

thanks for the reply will check out both of the links..just need to find ot my interest rates on both my loan and credit card

thanks again

chris