The "Pay ALL your debt off by Xmas 2012" challenge - PART 2!!!

mf0u1098

forgottendreams wrote: »

could someone please share the calculation they use for working out percentage paid?

Thanks

recurrent-ostrich wrote: »

Jemma will do it for you, but if you want to do it yourself you divide the amount paid by the total which will give you the percentage.

For example if your total debt is £10,000 and you've paid off £1000 you do 1000 divided by 10000 equals 0.1 which is 10%.

If your total debt is £2500 and you've paid off £150, you do 150 divided by 2500 which equals 0.06, so 6%

On a calculator, 1 would be 100%, 0.5 -50% 0.2 -20% 0.01 -1%

Does that make sense?

Just one thing I'd add is that all you need to do to get your actual percentage is x100. So in the above example do £150 / £2500 = 0.06 then multiply by 100 to get 0.06 x 100 = 6%

For a funny number:

If your total debt is £14671 and you've paid off £2543 then:

2543 / 14671 = 0.1733 the x100 = 17.33%

Hope this helps! xxx

mf0u1098

rdchick wrote: »

Ok lots of things have been flying out of my account just worked out that of the £96.04 I pay a month to my loan £73.80 of it is interest, only bringing my balance down by £20. If I was to plow £250 at least on top and get the loan cleared in say 6 months (omg that is a beautiful thought) what would happen with the interest? I know when you call them they tell you the balance and then the balance if you clear it today so does anyone know how they work that out?! I should have the loan until 2018 :eek: so I guess there will be a lot of interest I have already paid! xxx

The interest is work out on a downward linear scale so if your repayments are say £250/month then £50 is the capital repayment and £200 is the interest (please note these are just example figures, I don't actually know what the split would be on a £250/month repayment but I know that they interest is a large portion of this). The next month the amount of interest will decrease slightly whilst the capital repayment goes up and so on and so on... Basically it means that the banks get their money back even if you pay off your loan early.

Normally when you pay a loan off early then they will charge an early redemption penalty of 2 months interest to the loan and this is work out by using the interest at the month you've paid off. So if you finish your loan in the 13th month then they would charge you the interest calculated in months 13 and 14 (I think...). This gives your full and final settlement figure.

To show you how much interest is applied per month to a loan then just use the snowball calculator to give a good indication.

Hope this helps! xxx

HelenPie

mf0u1098 wrote: »

The interest is work out on a downward linear scale so if your repayments are say £250/month then £50 is the capital repayment and £200 is the interest (please note these are just example figures, I don't actually know what the split would be on a £250/month repayment but I know that they interest is a large portion of this). The next month the amount of interest will decrease slightly whilst the capital repayment goes up and so on and so on... Basically it means that the banks get their money back even if you pay off your loan early.

Normally when you pay a loan off early then they will charge an early redemption penalty of 2 months interest to the loan and this is work out by using the interest at the month you've paid off. So if you finish your loan in the 13th month then they would charge you the interest calculated in months 13 and 14 (I think...). This gives your full and final settlement figure.

To show you how much interest is applied per month to a loan then just use the snowball calculator to give a good indication.

Hope this helps! xxx

I don't know if it's still the case but when I worked in a bank, if you paid of *most* of your outstanding balance and then left the final payment to come out on it's own then you got around the interest thing. Have a funny feeling my bank mentioned something similar to me when I took mine out It may not always work but got to be worth a try, right? :cool:

Calling14

Another 150 pounds off today - such a difference having a lodger makes ;-)

mf0u1098

HelenPie wrote: »

I don't know if it's still the case but when I worked in a bank, if you paid of *most* of your outstanding balance and then left the final payment to come out on it's own then you got around the interest thing. Have a funny feeling my bank mentioned something similar to me when I took mine out It may not always work but got to be worth a try, right? :cool:

Oooooooh sneaky, I like it!

So if I pay my loan off today when there is still 26 months left then if I left all but the last DD payment to come out then will they just take that next month and my loan is over...? xxx

LittleMsStitch

I know it's not a lot but I have paid £50 off one of the credit cards and I am just waiting until my hubby gets paid tomorrow before we pay a biggish chunk off his credit card.

No. 289 - LittleMsStitch - £50/£5,333.99 = £5,283.99

mf0u1098

mf0u1098 wrote: »

Oooooooh sneaky, I like it!

So if I pay my loan off today when there is still 26 months left then if I left all but the last DD payment to come out then will they just take that next month and my loan is over...? xxx

oh actually I've just remembered that in the small print it says that I cannot overpay my loan, if I want to pay it off then it must be paid off in full...

mf0u1098

To help me run this thread easily, could you please all post your totals in large text and in a bold colour, i.e.:

£265.43/£7685.67
(where the first amount is the total you have paid off so far in this challenge and the second amount is the total you pledged to clear by Xmas 2012.

It would also be a big help if you could also put with it your challenge number.

i.e. another £50 paid off so now the total for
#001 is £315.43/£7685.67

By the way, don't worry about working out your % paid as I can do that for you!

rdchick

Ok so what you're saying is (sorry my brain is like mush today) that I can pay off my loan early but there might be a charge of 2 months interest... so that's like £40 yah? It is indeed a downward scale one, ie all the interest was piled on top... I took out the loan for £3500 in 2010, the current balance is £3323.47 so do I take that as the figure I am going to be paying off (ie: 7x £500) or should I ask the bank what it would be if I was to pay off all my loan by August/September? so I can work out how long it will take to pay off? xxx

mf0u1098

rdchick wrote: »

Ok so what you're saying is (sorry my brain is like mush today) that I can pay off my loan early but there might be a charge of 2 months interest... so that's like £40 yah? It is indeed a downward scale one, ie all the interest was piled on top... I took out the loan for £3500 in 2010, the current balance is £3323.47 so do I take that as the figure I am going to be paying off (ie: 7x £250) or should I ask the bank what it would be if I was to pay off all my loan by August/September? so I can work out how long it will take to pay off? xxx

I'd do what you've suggested and give them a ring to find out what a full and final settlement would be later in the year to give you a goal to work towards. I know that I have over £4k to pay off my loan but I also know that I would only have to pay £3.5k if I paid it all off now... Worth a go and could save you some interest! xxx