Help and Advice please

obwales

Hi All,

I've been actively working my way out of debt last couple of years. i had high interest credit cards, pay day loans and a loan at 1 point.

At the moment my partner kindly got an interest free credit card and I've just over 4k on this. All my cards and pay day loans on this. For past 3 months been paying £125 per month off.

The other out going I've got is £93 per month towards a welcome finance loan that I defaulted on just over 2 years ago. this default is logged against my credit file, I recently received annual statement and appears all interest is paid to them now and any payment going towards remaining debt. My question is would I be better off reducing the payment on this and increasing payments to my partners credit card to around £200? Just I'm thinking the default will be on my credit file for another 4 years regardless if pay off today etc. But would Welcome take a £10 per month payment? What is their position as they've already logged default could they proceed to ccj or something if I reduce payment? Just I called them other day and they were adamant £10 not enough per month.

I realise will take a lot longer to clear Welcome debt but my concern is clearing debt on partners card which at 200 per month would be gone in 2 years.

Any advice be much appreciated.

Many thanks in advance

obwales

opinions4u

Welcome will still be charging interest. Interest doesn't just stop when you've repaid a certain number of payments.

I would hazard a guess that the rate is rather high too.

So keep prioritising the Welcome payments.

obwales

Hi,

i took out the loan back in 2006 over 5 years. on all my annual staements since I defauted they would show my payment, then interest. But the last statement i received shows interest being addded 3 times but then no more. Surely they can only charge interest for the period of the loan agreement. which in effect i've paid off now?

paulmapp8306

no - they can charge interest on anything you owe them. Just because the loan agreement period has expired means nothing.

While a creditor may agree to reduce, freeze, or stop interest on a ballance owed it is completely their choice - and dont legally have to stop anything.

obwales

thanks for replies.

They must have stopped interest. Because i've paid 93 a month for 2 years and balance of my debt hardly reduced sue to interest being applied. But on my most recent statement the the last 9 payments have reduced the debt considerably. I bet if i reduced payment they would start applying interest again. I'll ring them later to clarify this.

qpop

obwales - A pre-agreed amount of interest is "front-loaded" onto a loan, which I think is what is causing you the confusion.

Basically this figure is arrived at by working out the total interest payable throughout the loan and tacking it on top of the loaned amount.

If you reduce payments then you will no longer pay the loan off by the agreed time, and therefore the interest will be re-calculated and re-tacked on.