London Socialite Sees The Light

LondonGirl252

Hi all,

£1 sent to the credit card again for Payment a day

I only have £103.79 in my account but I'm due back £128 in expenses as I paid my professional fees this month and £26 from my friend as I helped him out the other day, so once they're in I'm on track!

The last two night as we have worked so late I've ended up buying a sandwich and soup from pret to keep me going which has been a paid as it ruins my NSD! I've not spent anything yet today so going to try and avoid pret later as I want to get no2!!

I got a statement from Nationwide in the post today giving me an update on my loan.
They said to pay off the loan the amount is £3,268.36 but in my debt total I include the total amount payable inc interest which is now £4,191.60 (total amount repayable minus payments made) so this suggests that paying off the loan early will reduce the amount of interest I pay. When I took out the loan they said increasing my monthly DD's would just shorten the life of the loan not reduce the interest. But it seems if I paid it in full early that I would pay a lower figure - does anyone disagree on my understanding of this???

This pleases me as it's more likely that in Feb after paying £104.79 more per month off that my bonus (fingers crossed we get one) might be able to clear it

The figures on that statement make me feel ill.:silenced:
The amount borrowed was £4,101.40
The amount re-payable was £6,287.40

Total amount re-payable minus payments I've made so far is £4,191.60

I took out the loan on 27/10/2010 therefore its taken me 1 year and 9 months just to pay the f***ing INTEREST!!!!!! :mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad:

Of course I am now hoping I'll pay it off earlier in full and reduce the amount of interest paid overall. :A

JennyJenJen

You only get the interest rebate if you settle in full, which is why if you increase the dd you just finish the loan earlier rather than reduce the interest.

The interest is calculated using something called rule of 78 and usually is front loaded so say your payments are £100 a month, in month 1 £99 might be interest with £1 going towards the capital borrowed. Month 2 £98 interest and £2 towards capital. So the closer you get to the end of the loan the smaller the interest rebate as you have already paid most of it upfront so to speak. If you overpay, it just comes off month 3 then 4 as the interest isnt recalculated everytime you make a payment, its all done at the beginning and only recalculated if you settle in full

Does that make sense? Am sure it does as you are much more mathmatically minded than me! Am sure there are much clearer explanations online!

MuffinTops

Hi LG,
Our previous non MSE lives have a lot to answer for, don't they? It's good there was a real positive in there though that you'll hopefully be free of it in February when your bonus arrives. That's great news.

Erme

I'd pay off the debt with the highest interest first....

Make extra payments on that - to get that down first.....then when that's gone pay off the loan...

Do you have an overdraft? Finding mine impossible to shift :eek:

Made a few extra payments to loan then paid the remainder off the other month and even though I had only about 10 months or so to go on the loan I saved myself £70 so it's deffo worth doing

E

allybee101

I struggle with my overdraft too. It's about £2400.
I try to move my spending budget into another account and use that leaving my DDs to come out of the current account plus the surplus.

However my plans are invariably scuppered by unexpected things like the hoover blowing up...

LondonGirl252

JennyJenJen wrote: »

You only get the interest rebate if you settle in full, which is why if you increase the dd you just finish the loan earlier rather than reduce the interest.

The interest is calculated using something called rule of 78 and usually is front loaded so say your payments are £100 a month, in month 1 £99 might be interest with £1 going towards the capital borrowed. Month 2 £98 interest and £2 towards capital. So the closer you get to the end of the loan the smaller the interest rebate as you have already paid most of it upfront so to speak. If you overpay, it just comes off month 3 then 4 as the interest isnt recalculated everytime you make a payment, its all done at the beginning and only recalculated if you settle in full

Does that make sense? Am sure it does as you are much more mathmatically minded than me! Am sure there are much clearer explanations online!

Thank you!!! Yes it does, i learnt that method at bean counter school but it was called something else... long time ago though! Thanks for explaining

LondonGirl252

MuffinTops wrote: »

Hi LG,
Our previous non MSE lives have a lot to answer for, don't they? It's good there was a real positive in there though that you'll hopefully be free of it in February when your bonus arrives. That's great news.

Yes they do!!!
Thans I can't wait and it gives me motivation to work harder until then that if the bonus is small then it might still get me there :A

LondonGirl252

Erme wrote: »

I'd pay off the debt with the highest interest first....

Make extra payments on that - to get that down first.....then when that's gone pay off the loan...

Do you have an overdraft? Finding mine impossible to shift :eek:

Made a few extra payments to loan then paid the remainder off the other month and even though I had only about 10 months or so to go on the loan I saved myself £70 so it's deffo worth doing

E

My 2 credit cards are both at 0% and there is just one loan left now which has interest but I only save on the interest if I pay off in full, so knuckling down to the credit cards and will hopefully use my bonus to pay the loan off in full. I could save each month towards this but I dont trust myself not to spend it and I like seeing the credit cards disappear

I did have one when I started and I struggled horribly with it. In the end I did a balance transfer from my credit card to the current account (halifax) and paid it off from my credit card. I haven't applied for one with the current account I have now

Well done :T

LondonGirl252

allybee101 wrote: »

I struggle with my overdraft too. It's about £2400.
I try to move my spending budget into another account and use that leaving my DDs to come out of the current account plus the surplus.

However my plans are invariably scuppered by unexpected things like the hoover blowing up...

Ouch, they're so hard to clear. Does the "spending budget" account have a debit card? Have a look and see if there are any 0% deals to balance transfer it to a credit card - I did this with Halifax so may be worth a go??

LondonGirl252

Yesterday I bagged NSD no 2!

I have sent another £1 to the credit card for payment a day

Today is spendy as I topped up my canteen card to buy lunch and I'm going out for ONE drink after work... i will not succomb to peer pressure...i will not succomb to peer pressure...i will not succomb to peer pressure...i will not succomb to peer pressure...i will not succomb to peer pressure...i will not succomb to peer pressure...i will not succomb to peer pressure...i will not succomb to peer pressure...

Tomorrow I am going riding which Im looking forward to as not been in a few weeks and I have a nice horse to ride