The "Pay ALL your debt off by Xmas 2012" challenge

mrso2b

Just paid another £25 off the First Direct card so new figures are:

152 :jmrso2b £308.62 / £12,000

Got £296 left on this card so going to chip away at it this month and hopefully this will be gone by next payday!

mrso2b

PedroMatias wrote: »

Right... advice time.

I spent a bit of time on spreadsheets and the like, deciding whether getting a small loan at low APR to pay off my CC and car would be beneficial. I've calculated it would be by a few hundred pounds, even with early repayment charges.

So, I've applied and been accepted for a £7,500 loan from a mainstream bank, representative APR of 6.4%. Below this amount, the APR jumped up. The plan is to pay off everything other than the parental loan with it, and because I'll have money left over, I'll give a lump sum to my mum (who I'm paying 4% interest to) and restructure the remainder of the debt with her so it finishes at Christmas 2012.

Assuming they don't offer me an APR that's significantly different to the representative, do you think this is a good idea? I'll need to be more vigilant and make sure I'm saving to pay it off, but DFD should be easier to reach. The other benefit is I'll be building up a lump sum in a savings account, which is never a bad idea in these times.

Should I sign on the dotted line?

I think it depends on if the interest rate is lower than what you are paying now on the debts and whether you are disciplined!

Can you overpay on the loan?

PedroMatias

mrso2b wrote: »

I think it depends on if the interest rate is lower than what you are paying now on the debts and whether you are disciplined!

Can you overpay on the loan?

The interest rate is significantly lower than the CC and car loan, hence the predicted savings. I can't overpay, but I can repay early (with a small fee) - hence the requirement to save towards my DFD rather than overpay. The total charge for credit is just short of what I'll save by paying off the car loan early, and when I factor in CC interest it becomes profitable.

gemred_21

PedroMatias wrote: »

Right... advice time.

I spent a bit of time on spreadsheets and the like, deciding whether getting a small loan at low APR to pay off my CC and car would be beneficial. I've calculated it would be by a few hundred pounds, even with early repayment charges.

So, I've applied and been accepted for a £7,500 loan from a mainstream bank, representative APR of 6.4%. Below this amount, the APR jumped up. The plan is to pay off everything other than the parental loan with it, and because I'll have money left over, I'll give a lump sum to my mum (who I'm paying 4% interest to) and restructure the remainder of the debt with her so it finishes at Christmas 2012.

Assuming they don't offer me an APR that's significantly different to the representative, do you think this is a good idea? I'll need to be more vigilant and make sure I'm saving to pay it off, but DFD should be easier to reach. The other benefit is I'll be building up a lump sum in a savings account, which is never a bad idea in these times.

Should I sign on the dotted line?

I think it sounds like a good idea, I know Loans always have this stigma attached to them, however we took one out 2.5 years ago and will be paid off in July 2012. You have to be disciplined though and don't use any other CC etc, we unfortunately used extra CC and hence why I'm in this challenge.

We were too keen to pay it off and thought we could meet the payments if we went for 3 years, but sadly forgot about all the extra things that life throws your way. So my advice would be to make sure you still have that extra cash left at the end of the month, just incase.

If your also saving by lumping it all together, then it makes sense.

PedroMatias

gemred_21 wrote: »

I think it sounds like a good idea, I know Loans always have this stigma attached to them, however we took one out 2.5 years ago and will be paid off in July 2012. You have to be disciplined though and don't use any other CC etc, we unfortunately used extra CC and hence why I'm in this challenge.

We were too keen to pay it off and thought we could meet the payments if we went for 3 years, but sadly forgot about all the extra things that life throws your way. So my advice would be to make sure you still have that extra cash left at the end of the month, just incase.

If your also saving by lumping it all together, then it makes sense.

Cheers, mind made up. My parental loan, looking into it, is closer to 6% so it becomes a no-brainer. Thanks for the advice!

loubie_lou

You sound pretty clued up pedro, JUST CLOSE the old CCs and you'll be fine! x

Calling14

Not sure if can pay off all debt on just one wage but will try my hardest to reduce it by xmas 2012 owe 12,224.35.

Perhaps being on here might kick me into doing something about it. Hopefully may get a lodger if he turns up today ;-)

DorsetGirl_2

Calling14 wrote: »

Not sure if can pay off all debt on just one wage but will try my hardest to reduce it by xmas 2012 owe 12,224.35.

Perhaps being on here might kick me into doing something about it. Hopefully may get a lodger if he turns up today ;-)

Good luck. I have found this thread really motivating so hang around and see what happens

jakes-mum

Hellooooooooooo

Just got anothe £5 amazon voucher through SB's :kisses3:

Its going to be a spendy week this week as DS and DD are off to their aunts on boxing day and she lives in north wales so I now need to go buy things like wellies and thermal pjs :rotfl: still no debt busting, just go no spare pennies BUT on a saving note . . . I managed to talk DH into NOT putting the £10 off my nana for christmas onto his bl**dy online game but save it to use toward 'the big present you are going to want to make better' :rotfl:

rictus123

Payday on Friday....yet i wont be making payment until round about the 1st, then the middle of Jan..probably nothing the end of Jan as a trip to America to pay for!